Ascopiave

Quarterly Report • Jun 13, 2016

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Interim Report

as of 31st March 2016

GENERAL INFORMATION 5
Directors, Officers and Company information 5
Main economic and financial data of the Ascopiave Group 6
REPORT ON MANAGEMENT 7
FOREWORD 7
The structure of the Ascopiave Group 9
Control of the Company 11
Corporate Governance and Code of Ethics 11
Internal audit 11
Transactions with related and affiliated parties 12
Significant events during the first quarter of 2016 13
Efficiency and energy saving 14
Litigations 16
Distribution of dividends 25
Own shares 25
Outlook for the Year 25
Goals and policies of the group and risk description 26
Additional information 29
Seasonal nature of the activity 29
Performance Indicators 29
Comments on the economic and financial results of the first quarter of 2016 31
General operational performance and indicators 31
General operational performance - The Group's economic results 33
General operational performance – Financial situation 34
General operational performance - Investments 36
Interim Report 38
Consolidated assets and liabilities statement 39
Income statement and overall consolidated income statement 40
Statement of changes in shareholders' equity 41
Consolidated financial statements 42
EXPLANATORY NOTES 43
Company information 43
General drawing-up criteria and accounting principles adopted 43
Use of estimates 43
Accounting standards, amendments and interpretations not yet applicable and not adopted
ahead of time by the Group 44
Consolidation area and principles 44
Synthesis data of fully consolidated companies and jointly controlled companies
consolidated through the equity method 45
COMMENTS ON THE MAIN CONSOLIDATED BALANCE SHEET ITEMS 47
Non-current assets 47
Current assets 52
Consolidated shareholders' equity 57
Non-current liabilities 59
COMMENTS ON THE MAIN CONSOLIDATED PROFIT AND LOSS ACCOUNT ITEMS 66
Revenues 66
Costs 67
Financial income and expense 71
Taxes 72
Non-recurrent components 72

Transactions deriving from unusual and/or atypical operations 72
OTHER COMMENTS ON THE ANNUAL FINANCIAL REPORT AS OF 31st MARCH
2016 73
Commitments and risks 73
Risk and uncertainty factors 73
Business segment reporting 78
Transactions with related parties 79
Financial statements representation pursuant to Consob resolution 15519/2006 81
Significant events after the end of the period considered 83
Synthesis data as of 31st March 2016 of jointly controlled companies consolidated through
the net equity method 84
Goals and policies of the group 87

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Annexes:

Declaration by the Manager - Certification of the Consolidated Financial Statements in accordance with art. 81-ter of Consob regulation no. 11971

GENERAL INFORMATION

Directors, Officers and Company information

Board of Directors and Board of Statutory Auditors

Name	Office	Duration of office	From	To
Zugno Fulvio	Chairman of the Board of Directors*	2014-2017	24/04/2014	Approval of budget 2016
Coin Dimitri	Indipendent Director	2014-2017	24/04/2014	Approval of budget 2016
Pietrobon Greta	Indipendent Director	2014-2017	24/04/2014	Approval of budget 2016
Paron Claudio	Indipendent Director **	2014-2017	19/06/2014	Approval of budget 2016
Quarello Enrico	Indipendent Director	2014-2017	24/04/2014	Approval of budget 2016

(*)Powers and attributions of ordinary and extraordinary administration, within the limits of the law and of the Charter and in observance of the reserves within the competence of the Shareholders' Meeting and the Board of Directors, according to the resolutions of the Board of Directors. (**)Mr. Paron Claudio replaces Mr. Piva Bruno who has resigned.

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Name	Office	Duration of office	From	To
Bortolomiol Marcellino	President of the Board of Auditors	2014-2017	24/04/2014	Approval of budget 2016
Biancolin Luca	Statutory Auditor	2014-2017	24/04/2014	Approval of budget 2016
Alberti Elvira	Statutory Auditor	2014-2017	24/04/2014	Approval of budget 2016

In-Company Control Committee	From	To	In-Company Control Committee	From	To
Coin Dimitri	29/04/2014	Approval of budget 2016	Coin Dimitri	29/04/2014	Approval of budget 2016
Quarello Enrico	29/04/2014	Approval of budget 2016	Quarello Enrico	29/04/2014	Approval of budget 2016
Paron Claudio	19/06/2014	Approval of budget 2016	Paron Claudio	19/06/2014	Approval of budget 2016

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Independent Auditors PriceWaterhouseCoopers S.p.A.

Legal headquarters and Company data Ascopiave S.p.A. Via Verizzo, 1030 I-31053 Pieve di Soligo TV Italy Tel: +39 0438 980098 Fax: +39 0438 82096 Share Capital: Euro 234,411,575 fully paid in VAT ID 03916270261 e-mail : info@ascopiave.it

Investor relations Tel. +39 0438 980098 fax +39 0438 964779 e-mail : investor.relations@ascopiave.it

Main economic and financial data of the Ascopiave Group

Economic figures

	1st Quarter 2016	% of revenues	1st Quarter 2015	% of revenues
(Thousands of Euro)
Revenues	182,512	100.0%	219,496	100.0%
Gross operative margin	36,004	19.7%	34,307	15.6%
Operating result	30,304	16.6%	28,642	13.0%
Net result for the period	24,138	13.2%	22,832	10.4%

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The gross operating margin (EBITDA) is the result before amortisation/depreciation, financial management and taxes.

Assets figures

(Thousands of Euro)	31.03.2016	31.12.2015	31.03.2015
Net working capital	36,472	56,689	70,926
Fixed assets and other non current assets	528,620	527,182	528,021
Non-current liabilities (excluding loans)	(49,996)	(49,698)	(53,272)
Net invested capital	515,097	534,173	545,675
Net financial position	(70,635)	(114,037)	(113,176)
Total Net equity	(444,461)	(420,137)	(432,498)
Total financing sources	(515,097)	(534,173)	(545,675)

Please note that 'Net working capital' is intended as the sum of the inventories, trade receivables, tax receivables, other current assets, accounts payable, tax payables (within 12 months), and other current liabilities.

Monetary flow data

(thousands of Euro)	First quarter 2016	First quarter 2015
Net income of the Group	22,651	21,394
Cash flows generated (used) by operating activities	47,059	19,587
Cash flows generated/(used) by investments	(4,113)	(3,178)
Cash flows generated (used) by financial activities	(43,424)	(49,664)
Variations in cash	(478)	(33,255)
Cash and cash equivalents at the beginning of the period	28,301	100,882
Cash and cash equivalents at the end of the period	27,823	67,627

REPORT ON MANAGEMENT

FOREWORD

The Ascopiave Group closed the first quarter of 2016 with a net consolidated profit of Euro 24.1 million (Euro 22,8 million as of 31st March 2015), with an increase of Euro 1.3 million, +5.7% as compared to the same period of the previous year.

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The consolidated net assets as of 31st March 2016 amount to Euro 444.5 million, (Euro 420.1 million as of 31st December 2015) and the net capital invested to Euro 515.1 million (Euro 534.2 million as of 31st December 2015).

In the first quarter of 2016, the Group accomplished investments for Euro 4.1 million (Euro 3.2 million as of 31st March 2015), mainly in the development, maintenance and modernisation of the networks and plants of gas distribution and the installation of electronic metres.

Activities

Ascopiave mainly operates in the sectors of distribution and sale of natural gas, as well as in other sectors related to the core business, such as the sale of electric power, heat management and co-generation.

The Group currently holds concessions and direct assurances for the supply of the service in 208 municipalities (208 municipalities as of 31st December 2015) and has a distribution network extending for over 8,300 km¹ (over 8,300 km as of 31st December 2015), providing a service to a catchment area bigger than 1 million inhabitants.

The activity of natural gas sale to end customers is carried out through subsidiaries of the parent company Ascopiave S.p.A., controlled exclusively or jointly with other shareholders.

In the gas sale segment, Ascopiave is one of the main National operators with over 413 million cu.m¹ of gas sold in the first three months of 2016 (450 million cu.m¹ as of 31st March 2015).

Strategic objectives

Ascopiave aims to pursue a strategy focused on the creation of value for its stakeholders, by maintaining the level of excellence in the quality of services offered, in the respect of the environment and social groups, to increase the value of the field in which it operates.

1

The data specified as regards the length of the distribution network and the volumes of gas sold are obtained by adding each Group company's data, previously pondering the data of the companies consolidated with the equity method according to the relevant share.

The Group intends to consolidate its leadership position in the gas sector on a regional level and is looking to reach a prominent position also at the national level, taking advantage of the liberalisation process currently underway. In this respect, Ascopiave follows a development strategy whose main guiding principles are dimensional growth, diversification in other divisions of the energy sector in synergy with the core business and the improvement of operative processes.

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Management trend

The volumes of gas sold in the first quarter of 2016 are equal to 413.6 million cubic metres, marking a decrease of 8.1% as compared to the same period of the previous year.

The volumes of electrical energy sold in the first quarter of 2016 were 98.0 GWh, marking a decrease of 10.5% as compared to the same period of the previous year.

As to the activity of gas distribution, in the first quarter of 2016, the volumes distributed through networks managed by the Group were 372.8 million cubic metres, an increase of 0.8% as compared to the same period in 2015. The distribution network as of 31st March 2016 has an extension of 8,330 km (8,312 km as of 31st December 2015).

Economic results and financial situation

Consolidated revenues of the Ascopiave Group in the first quarter of 2016 equal Euro 182.5 million, compared to Euro 219.5 million recorded in the first quarter of 2015. The decrease in the turnover is mainly due to the reduction in the revenues from natural gas sale (Euro -39.6 million), explained by lower amounts of gas sold and a decrease in unit sales prices.

The Operating Result of the Group equals Euro 30.3 million, marking an increase as compared to Euro 28.6 million in the first quarter of 2015. The increase in the Operating Result is mainly connected to improved results of the gas and electricity sales activities, explained by the increase in unit margins.

The Net Result of the Group equals Euro 24.1 million, increasing as compared to Euro 22.8 million in the first quarter of 2015, due to an increase in the operating result and a higher result of the companies consolidated through the equity method, which have more than offset the increase in net financial expenses and the increased fiscal charges on income taxes.

The Net Financial Position of the Group as of 31st March 2016 is equal to Euro 70.6 million, with an improvement of Euro 43.4 million as compared to Euro 114.0 million as of 31st December 2015. The cash flow of the period (given by the sum of the net result, allocations, amortisation and depreciations) has generated financial resources for Euro 29.8 million. The investment activity has absorbed financial resources for Euro 4.1 million, whereas the management of the working capital has generated financial resources for Euro 17.7 million.

The ratio between Net financial position and Net equity as of 31st March 2016 is equal to 0.16 (0.26 as of 31st March 2015).

The structure of the Ascopiave Group

The table below shows the company structure of the Ascopiave Group as on 31st March 2016.

89%	ASCOTRADE	100%	AP Reti Gas S.p.A.
51%	$\bullet$ ETRA exergiant	100%	SASM DG
100%	VERITAS	100%	edigas
48,999%	EstEnergy	48,86%	UNIGAS
49%	E ASM SET.
100%	Stretar
100%	PAG UPIN
80%	AMBAS

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Ascopiave S.p.A. share trend on the Stock Exchange

As of 31st March 2016, the Ascopiave share registers a quotation of Euro 2.292 per share, with an increase of 3.4 percentage points as compared with the listing at the beginning of 2016 (Euro 2.216 per share, referred to the quotation of 4th January 2016).

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Capitalisation of the Stock Exchange as at 31st March 2065 was equal to Euro 532.66 million² .

The quotation of the title during the first three months of 2016 showed a positive performance (+3.4%) which reflects the improvement of the industry index FTSE Italia Servizi di Pubblica Utilità (+5.6%). On the contrary, the indexes FTSE Italia All-Share (-12.2%) and FTSE Italia Star (-5.7%) have decreased.

In the following table we report the main shares and stock-exchange data as of 31st March 2016:

Share and stock-exchange data	31.03.2016	31.03.2015
Earning per share (Euro)	0.10	0.10
Net equity per share (Euro)	1.87	1.82
Placement price (Euro)	1.800	1.800
Closing price (Euro)	2.292	2.366
Maximum annual price (Euro)	2.298	2.366
Minimum annual price (Euro)	2.010	1.760
Stock-exchange capitalization (Million of Euro)	532. 66	554.07
No. of shares in circulation	222,310,702	222,216,361
No. of shares in share capital	234,411,575	234,411,575
No. of own share in portfolio	12,100,873	12,195,214

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______________________________________________________________________________________________ The Stock exchange capitalisation of the main listed companies active in the local public services (A2A, Acea, Acsm-Agam, Hera and Iren) as of 31st March 2016 equalled Euro 12.4 billion. Borsa Italiana website (www.borsaitaliana.it).

Control of the Company

As of 31st March 2016, Asco Holding S.p.A. directly controls 61.562% of the Ascopiave S.p.A. share capital. The share composition of Ascopiave S.p.A., according to the number of shares held, is as follows:

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In-company elaboration based on information received by Ascopiave S.p.A. pursuant to art. 120 TUF (Consolidated Finance Law).

Corporate Governance and Code of Ethics

During the first quarter of 2016, Ascopiave S.p.A. continued its operating improvement process of the corporate governance planned during past years, strengthening the risk management system and introducing further improvements to the tools in order to defend investors' benefits.

Internal audit

The activity plan of the Internal Audit structure is approved yearly by the Board of Directors of the Company. In particular, the audit activities included in the above-mentioned activity plan, based on the prioritisation of the main risks, concern both areas of compliance and business processes related to the business areas deemed highly strategic.

Appointed Manager

The Appointed Manager, helped by the Internal Audit services, has reviewed the adequacy of the administrative and accounting procedures and has continued to monitor the important procedures for the drafting of financial information. To this end, the Company has adopted new tools of continuous auditing, allowing the automation of the control procedures.

Organisational, management, and controlling model pursuant to Leg. Decree 231/2001

Ascopiave S.p.A. and all of its subsidiaries have adopted an Organisational, management and controlling model; they have also adhered to the Code of Ethics of the Parent company Ascopiave.

The Company, availing of the activity of the Supervisory Board, constantly monitors the efficiency and adequacy of the

Model adopted.

The Company has also continued its promotional, diffusion and understanding activity of the Code of Ethics as concerns all its interactions, especially with business and institutional parties.

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The 231 Model and the Code of Ethics can be read in the corporate governance section at www.gruppoascopiave.it.

Transactions with related and affiliated parties

The Group has the following transactions with related parties with the following types of costs:

• Purchase of IT services from subsidiary ASCO TLC S.p.A.;
• Purchase of materials for the production process and maintenance services from the affiliate company SEVEN CENTER S.r.l.;
• Credit transactions in favour of ASM Set S.r.l., jointly controlled company;
• Administrative services for ASM Set S.r.l., jointly controlled company;
• Purchase of gas from the affiliate company Sinergie Italiane S.r.l., in liquidation;
• Administrative services and services of personnel of Unigas Distribuzione S.r.l.;
• Purchase of electricity from Estenergy S.p.A., jointly controlled company.

The Group has the following transactions with related parties with the following types of revenues:

• Leasing of owned real properties to the subsidiary ASCO TLC S.p.A.;
• Leasing of owned real properties to the affiliate Sinergie Italiane S.r.l. in liquidation;
• Relations of active current accounts correspondence to ASM Set S.r.l. jointly controlled company;
• Administrative services and services of personnel of Ascopiave S.p.A. to ASM Set S.r.l., Unigas Distribuzione S.r.l., Sinergie Italiane S.r.l. in liquidation and SEVEN CENTER S.r.l.;
• Sale of electricity to ASM Set S.r.l., jointly controlled company.

Relationships deriving from tax consolidation with Asco Holding S.p.A.:

Ascopiave S.p.A., Ascotrade S.p.A., Asm DG S.r.l., Edigas Esercizio Distribuzione Gas S.p.A., Pasubio Servizi S.r.l., Blue Meta S.p.A. and Veritas Energia S.p.A. have also adhered to the consolidation of tax relations held by the Parent company Asco Holding S.p.A., highlighted in the current assets and liabilities.

We would like to point out that these relations are characterised by the highest transparency and by market conditions. As regards each relationship, please see the Explanatory Notes.

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The table below shows the economic and financial nature of the transactions described above:

Ascopiave Group

	Trade	Other	Trade	Other		Costs			Revenues
(Thousands of Euro)	receivables	receiva	payables	payable	Goods	Services	Other		Goods Services Other
Parent company
ASCO HOLDING S.P.A.	14	0		0	0		8,341	0	14	170
Total parent company	14	0	0	0	0	0	8,341	0	14	170
Affiliated companies
ASCO TLC S.P.A.	82	52	52		0		0	0	31	73
SEVEN CENTER S.R.L.	10	0	25	0	0	24	0	0	10	0
Total affiliated companies	92	52	77	0	0	24	0	0	41	73
Subsidiary companies
Estenergy S.p.A.	52	0	13	0	0		0	0	0	0
ASM SET S.R.L.	788	0	6	449	12	5	3	1,786	117	6
Unigas Distribuzione Gas S.r.l.	52	0	2,981	0	0	4,202	0	23	19	0
SINERGIE ITALIANE S.R.L.	14	9,900	9,900	0	10,293		0	0	17	0
Total subsidiary companies	879	9,900	12,873	449	10,305	4,206	3	1,809	153	6
Total	985	9,951	12,950	449	10,305	4,230	8,344	1,809	209	249

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Significant events during the first quarter of 2016

On 18th January 2016, Ascopiave, along with other operators, filed an appeal before the Council of State against the judgement of the Regional Administrative Court of Lombardy no. 2221/2015.

In February 2016, the Law no. 21/2016 was approved, which contains provisions governing the distribution of gas.

In particular, Article 3 establishes that the time limits for the publication of the tender notices envisaged in the earlier legislation should range from a maximum of 14 months to a minimum of 5 months, depending on the group to which the Minimum Territorial Area belongs.

Subsequent to the expiration of the time limits within which the awarding entities designated by the Municipalities should have published the tender notices, the new legislation provides that the competent Region for the Area grants six extra months, after which it may invite tenders by appointing an acting Commissioner.

If two months elapse without such appointment, the Ministry of Economic Development, in agreement with the Region, may intervene by appointing its own acting Commissioner.

The law has also abolished the penalties under the scope of the Municipalities established by the previous legislation in the event of delayed publication of tender notices.

Other significant events

Establishment of AP Reti Gas S.p.A.

On 18th March 2016, the company AP Reti Gas S.p.A. was established, with a share capital of Euro 200 thousand, fully paid-in, 100% controlled by Ascopiave S.p.A.. Commencing 1st July 2016, it will be entrusted with Ascopiave S.p.A.'s business unit in charge of natural gas distribution, in compliance with the unbundling obligations that require the separation between sales and natural gas distribution integrated in the same corporate group.

Combination of Veritas Energia S.p.A.

On 10th February 2014, the purchase from Veritas S.p.A. of the remaining percentage of Veritas Energia S.p.A.'s share capital was finalised. As a consequence, the total control of the company was acquired, against the payment of Euro 4 million. Therefore, the company Veritas Energia S.p.A. was fully consolidated by the Ascopiave Group commencing 1st

January 2014.

The acquisition agreement envisaged, under the scope of Veritas S.p.A., a guarantee on third party receivables existing at the closing date in order to cover the event of non-collection within the 24 subsequent months, up to Euro 5,000 thousand.

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For this purpose, the seller had paid Ascopiave S.p.A. a guarantee deposit, bearing interests, equal to Euro 2,838 thousand, recognised until 31st December 2015 in the item financial liabilities, and this liquidity was connected to the purchase of two-year "repurchase agreements". The difference between the maximum amount of the guarantee set forth in the agreement, equal to Euro 5,000 thousand, and the deposit amounting to Euro 2,838 thousand was guaranteed by Veritas S.p.A. to Ascopiave S.p.A. through a suitable letter of guarantee issued by the company itself.

On 10th February 2016, the restriction on the amounts received by the seller expired and, consequently, the amount of the compensation that the seller should have paid Ascopiave S.p.A for the non-collection of the receivables was calculated, to the tune of Euro 396 thousand. Subsequently, the residual deposit was returned, along with the letter of guarantee issued by Veritas S.p.A. The compensation was booked in "Other income" in accordance with the provisions of the IFRS 3 accounting standard, as the business combination was already definitive after 12 months of acquisition.

Efficiency and energy saving

In order to meet the energy saving requirements specified by Decree dated 20th July 2004, in 2006 and 2007 Ascopiave realised the following two projects (the second in several phases):

• The installation of thermoregulation and computerised management tools in public buildings;
• Distribution of florescent light bulbs for electrical energy savings and a kit including a low-flow shower head and a low-flow tap to save hot water to all of its domestic clients.

The project on remote management was concluded in 2009, whereas the main one, relating to the distribution of the energy saving kit, ended in the first semester 2010, with the assignment of about 5,000 certificates.

In 2015, Ascopiave decided to resume the implementation of projects to obtain the certificates and to this end it submitted a request to enhance the efficiency of gas preheating systems for the distribution network.

In order to fulfil its current and future need, Ascopiave S.p.A. will have to realise new projects of energy saving and buy certificates on the market. With Resolution AEEG EEN 9/11 issued on 27th October 2011, the new guidelines for the energy efficiency market were established, which also provide for an adjustment of the certificates to the useful life of the project. This should support the offer of certificates, which is still below the expectations of the targets set for distributors.

At the closing date of the Interim Report as of 31st March 2016, the 2015 target (equal to 84,057 Energy Efficiency Certificates) was partially achieved, even if the certificates purchased, to be delivered by 31st May 2016, exceed the minimum threshold of 60%. According to current regulations, penalties are applied if a lower percentage is achieved.

As concerns 2016, Ascopiave S.p.A. received a communication from GSE which quantifies an obligation of 104,012 white certificates, to be delivered by 31st May 2017.

Subscription, with the Municipalities involved, of a convention for the adoption of a shared procedure aimed at the agreed quantification of the "Residual Industrial Value" of the networks

The regulatory amendments which replaced each other over the past years and in particular the legislation which provided for the selection of the operator of the distribution service through the so-called "territorial calls for tenders" tool, have led to, among other things, the need to determine the Residual Industrial Value (RIV) of the plants owned by the Operators.

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Normally, in relation to this aspect, the concession agreements governed two "paradigmatic" situations, namely:

(i) The early redemption (normally governed with reference to Royal Decree no. 2578/1925) and

(ii) the reimbursement from the (natural) expiration of the concession.

The eventuality of a "force of law" expiration, preceding the effective date of the "contractual" expiration, (as a rule) was not envisaged (and therefore governed) in the concession deeds.

Substantially, the case in question (earlier termination imposed by law) represents a "third category", in some ways similar to the exercise of early redemption (from which, however, it differs significantly for the lack of a will independently formed to that effect by the Body) and in other ways similar to the expiration of the concession term (which however has not expired).

At least until Ministerial Decree 226/2011, there were no legislative and/or regulatory norms which precisely defined the methods and criteria to determine the R.I.V. of the plants and which could therefore complement the contractual clauses, often deficient.

Legislative Decree no. 164/2000 as well, until the recent amendment introduced in the first place with Law Decree 145/2013, and then Law 9/2014, merely referred to Royal Decree 2578/1925 which, however, ratified the method of the industrial estimate without setting precise assessment parameters.

The situation illustrated above entailed the necessity to define specific agreements with the Municipalities aimed at reaching a shared estimate of the R.I.V.. Just consider that the lack of such agreements in the past has often led to administrative and civil/arbitral litigations.

The situation of the Municipalities partners of Asco Holding S.p.A. was even more peculiar in the sense that, with the latter, there is not a real concession deed in "canonical" form, but various deeds of assignment to Companies ("Azienda Speciale", at the time). These deeds have ratified, at the same time, the continuation of the award of the service previously provided by the Bim Piave Consortium.

It is evident that, as deeds of assignment, a real regulation concerning the purchase and/or the termination of the management was not and could not be envisaged.

With the above-mentioned partner Municipalities, Ascopiave has signed a convention which implied hiring a renown independent competent professional in order for him to determine the fundamental criteria to apply to calculate the RIV of the gas distribution plants.

The related negotiated procedure performed adopting the criterion of the most economically advantageous tender ended on 29th August 2011.

The expert has written a report on the "Fundamental criteria to calculate the RIV of the natural gas distribution plants located in the Municipalities currently serviced by Ascopiave S.p.A." which was approved on 2nd December 2011 by Ascopiave's Board of Directors and then by all 92 Local Bodies by City Council Resolution.

In 2013 Ascopiave submitted the state of consistency and the appreciation of the plants determined applying the criteria set in the Report, offering at the same time its willingness to perform the cross-examination with the Municipalities, aimed at analysing the documents.

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To date, following the outcome of the technical cross-examination, 87 Municipalities (unchanged since 31st December 2015) have approved the residual value.

As part of the above process, the reciprocal relations mostly connected to the management of the service were governed as well, since both the payment of "one-off" amounts (2010 – signature of supplementary deeds) for Euro 3,869, and (since 2011) real fees for variable amounts and equal to the difference, if positive, between 30% of the "restriction on revenues" recognised by the tariff regulation and the amount already received by the Municipality itself as a dividend in 2009 (financial statements 2008) are envisaged.

In particular:

• Euro 3,869 thousand in 2010;
• Euro 4,993 thousand in 2011;
• Euro 5,253 thousand in 2012;
• Euro 5,585 thousand in 2013;
• Euro 5,268 thousand in 2014;
• Euro 5,258 thousand in 2015.

were paid for a total amount of Euro 30,226 thousand.

During 2015, Ascopiave S.p.A. made available to the Municipalities belonging to the Minimum Territorial Areas of Treviso 2 - Nord and Venezia 2 – Entroterra and Veneto Orientale (69 municipalities out of 92), an update of the valuations of the plants as of 31st December 2014, by applying the valuation criteria agreed upon and by providing a calculation of the assessment of private contributions to be deducted from the residual industrial value pursuant to Law 9/2014.

Litigations

CLASS I – ADMINISTRATIVE LITIGATIONS

As at 31st March 2016, as far as concessions are concerned, no administrative litigations are pending.

CLASS II – LITIGATIONS ON THE VALUE OF PLANTS - CIVIL LAW

As at 31st March 2016, the following litigation is pending:

MUNICIPALITY OF CREAZZO:

A trial is pending between Ascopiave and the Municipality of Creazzo for the establishment of the industrial residual value of the distribution plants (delivered in 2005 to the new operator) following the result of the previous Judgement, with respect to which the Court of Appeal of Venice, with Judgement no. 2178/15, has accepted the appeal of the Municipality, ratifying the validity of the arbitral clause set forth in the original Agreement, thereby cancelling the Judgement of the Court of First Instance dated 25th August 2014, by which the Single Judge sentenced the Municipality

to pay an amount of Euro 1,678 thousand. Although the Group hopes to reach a settlement agreement, with a conservative approach aimed at avoiding the expiry subsequent to Judgement 2178, on 11th December 2015, Ascopiave S.p.A. gave a Notification of Litigation to start the Arbitration procedure.

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CATEGORY III – LITIGATIONS ON THE VALUE OF PLANTS - ARBITRATIONS

As at 31st March 2016, the following litigations are pending:

MUNICIPALITY OF COSTABISSARA:

An arbitration is pending before the Court of Appeal of Venice for the establishment of the industrial residual value of the distribution plants (delivered in to the new operator during FY 2011). The Municipality, by a deed notified on 12th December 2015, appealed the Award dated 25th-26th May 2015.

The first hearing is scheduled for 19th May 2016.

The Arbitration Commission ordered the Municipality to pay the sum of Euro 3,473 thousand, in addition to the interests at the date of filing the Award. In the same Measure the costs of the procedure were quantified in Euro 210 thousand (plus VAT, Lawyers' social security fund and overheads), two-thirds of which under the scope of the Municipality and one third under the scope of Ascopiave S.p.A.. The Award was declared enforceable by the Court of Vicenza on 7th July 2015.

MUNICIPALITY OF SANTORSO:

An arbitration is pending between Ascopiave S.p.A. and the Municipality of Santorso for the establishment of the residual industrial value of the distribution plants (delivered in 2007 to the new operator). The start of the procedure was necessary as a result of the Judgement dated 4th September 2013 by which the Judge declared that the Court of Vicenza has no jurisdiction for the validity of the arbitral clause set forth in the original Agreement. Noting the failure of attempts to amicable settlement, on 12th November 2013, Ascopiave S.p.A. served the litigation notice with the appointment of the party Arbitrator. The Municipality, by resolution dated 26th November 2013, appointed its Arbitrator. By decision of the President of the Court of Vicenza dated 31st January 2014 (taken upon request by Ascopiave) the third Arbitrator and the Chairman of the Panel were appointed. The Municipality has contested this procedure (also set forth in the concession agreement) supporting the applicability of the new law dated 2012 which, amending the Public Contracts Code, introduced a peculiar regulation with respect to the arbitration proceedings with the Public Bodies which envisages, among other things, the appointment of the third Arbitrator by the Court of Arbitration of AVCP (Authority for the Supervision of Public Contracts for works, services and supplies). The Authority has adhered to the request, envisaging a retroactive application of the new rule and introducing a sort of supervening invalidity of the arbitral clauses. In this perspective it has scheduled the draw of the third Arbitrator on 17th April. Ascopiave S.p.A. has always expressed its opposition to this formulation (most recently with the note to the AVCP dated 15th April 2014) and therefore considers the Panel perfectly formed, which, moreover, at its meeting held on 14th April 2014, confirmed its legitimacy.

AVCP's Chamber of Arbitration has submitted the extract of the minutes of the meeting held on 17th April 2014 which ratified the acknowledgement of Ascopiave S.p.A.'s communication. As a consequence, the proceeding was declared extinguished.

With a partial award dated 10th January 2015, the Panel confirmed the legitimacy of its constitution and therefore the

full legitimacy to proceed.

With order dated 27th February 2015, the Panel set an investigation by a court-appointed expert to determine the value of the plants.

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The court-appointed expert witness has submitted his report within the deadline (30th November 2015). The report has been strongly contested in detail by the defendant's expert and Ascopiave's attorney.

At the hearing held on 21st December 2015, the Panel gave the Parties a time limit for filing a defence (1st February 2016) to respond to the respective notes filed during the hearing, relating to the expert's reports prepared by the courtappointed expert witness.

In view of the aforesaid challenges and the subsequent applications filed by the Parties, the Panel has allowed the latter to consult the court-appointed expert witness on 10th March 2016. The Panel has therefore decided that the courtappointed expert witness shall address the questions filed within 29th April 2016. Ascopiave S.p.A. has filed its questions within the deadline. The Parties are currently awaiting the court-appointed expert witness's findings.

The expert's operations, therefore, are to be considered not concluded and indeed, still in progress.

CATEGORY IV – PENDING ADMINISTRATIVE LITIGATIONS - NOT CONCERNING CONCESSIONS

As of 31st March 2016, the following litigations are pending:

ASCOPIAVE S.p.A. – HEADQUARTERS EXTENSION:

An appeal before the Council of State filed by the company Setten Genesio S.p.A., for the tender involving the construction of the new company headquarters and aimed at obtaining the review of the sentence no. 6335/2010 issued by the Regional Administrative Court of Veneto that, despite admitting the appeal filed by the company and thereby annulling the tender acts, rejected the request for compensation for damage (for about Euro 1,300 thousand) against Ascopiave and the company Carron S.p.A..

In order to obtain the review of the First Instance Sentence, Ascopiave S.p.A. has filed an incidental appeal.

By a communication dated 29th September 2015, however, the Lawyer of the company reported that the Council of State, Section V, scheduled the public Hearing for the discussion of the appeal on 24th November 2015. The main issue will be focused on the claim for damages pursuant to the Criminal Code (Euro 1,300 thousand), in relation to which the same arguments that led to the non-acceptance in the first instance will be proposed again. Although the company hopes for a similar outcome, the risk of a partial acceptance and therefore a sentence, at least on a lump-sum basis, cannot be neglected. The judgement is pending.

With Judgement no. 275/2016 dated 27th January 2016, the Council of State allowed the interlocutory appeal filed by Ascopiave and therefore rejected both the main appeal and the request for compensation (Euro 1,300,000) submitted by Setten Genesio, without prejudice to the compensation of legal costs. As a consequence, Ascopiave is not indebted to Setten Genesio.

AEEGSI – RESOLUTION ARG/GAS 241/2013 – 533/2013:

An appeal to the Regional Administrative Court of Latium, which overrules Ministerial Decree dated 5th February 2013 approving the agreement template for managing the service subsequent to the following calls, limiting to the last part of art. 21.3 where the manager "supplies the default service according to the methods defined by the Authority." This is a merely precautionary measure aiming at avoiding the risk of lack of interest in the aforesaid main judgement. Given the

merely instrumental nature and Judgement issued on 6 th December 2014, by which the Council of State allowed the appeal filed by AEEGSI and, as a consequence, cancelled the Judgement issued by the Regional Administrative Court of Lombardy no. 3272 of 28th December 2012, the Proceedings will not be carried on.

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With appeal to the Regional Administrative Court of Lombardy Milan, Resolution 241/2013 was contested as well. The main reasons are: failure to envisage a compensation for the default service interventions in progress; the provisions concerning delay penalties or failure to implement power failure to be paid by the distributor even if the delay or the failure to implement depend on causes not attributable to the distributor. Finally, in connection with previous appeals (pending at that time), the "motivation" given to the provision was contested: according to the AEEGSI, this motivation only derives from the need to obviate a sort of "incompetence" of the distributors.

AEEGSI further intervened on the matter, with Resolutions 533/2013 and 84/2014. On 21st January 2014 an appeal was filed against Resolution 533/2013 before the Regional Administrative Court of Lombardy Milan. The reasons are similar to those that led to appeal Resolution 241/2013.

In early-March 2015, it was disclosed that, with judgements no. 593 and 594/2015, the Regional Administrative Court rejected the appeals of 2i Rete Gas S.p.A. and Italgas against the same resolutions 241/2013 and 533/2013.

The interest in the judgement has somewhat diminished because the regulatory environment has been profoundly changed by the subsequent numerous legislative measures and there is therefore a need to evaluate other judgements with respect to the proceeding brought by other companies in the sector.

AEEGSI – RESOLUTIONS ARG/GAS 28/12 – 193/12 – 246/12 – 631/2013:

An appeal before the Regional Administrative Court of Lombardy – Milan, against the Authority for Electricity and Gas for cancelling Resolution ARG/gas 28/12, relating to the change from traditional meters to electronic meters, remotely read and managed; in particular: for the failure to recognise the residual value of the replaced meters still having a valid seal; for the wrong (underestimated) indication/recognition of standard costs for the new appliances; for the obligation to use electronic meters only as from 1st March 2012 in spite of the fact that the technology needed is not yet available at an industrial level.

Subsequently, as partial modifications to Resolution 28, the AEEGSI issued Resolutions 93/2012 and 246/2012, which, however, were not sufficient to withdraw the company's complaint. The deadline set on 1st March 2012 was cancelled and postponed to 31st December 2012. The company has filed an appeal against both resolutions with additional grounds. Similarly, Resolution 316/2012 through which the AEEGSI further intervened on the matter, has also been contested.

With Resolution 631/2013 the AEEGSI further intervened on the matter, amending Resolution 28/2012. Therefore, the new stay request, submitted with reference to the previous rules, (also contested) was withdrawn. The proceedings are formally still in progress; however, by virtue of Resolution 631, they should/could be considered without further legal interest.

GUIDELINES – MINISTERIAL DECREE 22ND MAY 2014

An appeal to the Regional Administrative Court of Latium – Rome against the Minister of Economic Development for the cancellation of Ministerial Decree dated 22nd May 2014 concerning the introduction of Guidelines for the determination of the residual industrial value. As part of the same proceedings, the issues of constitutional legitimacy and/or preliminary ruling as concerns Law 9 and 116 of 2014, in the section which has modified art. 15, paragraph 5 of

Legislative Decree 164/2000 (retrospective deduction of private contributions and time limit of agreements' validity) were raised. The Regional Administrative Court, with reference to the appeals filed by other Distributors including an application for suspension, has scheduled the hearing on 27th June 2015. Ascopiave S.p.A.'s lawyers will request that the proceedings are discussed during the same hearing, or another one to be scheduled.

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The Court has ordered the postponement of the discussion to another Hearing to be scheduled subsequent to the entry into force (29th July 2015) of Ministerial Decree no. 106 dated 20th May 2015, amending Decree 226/2011, and its appeal. The Ministerial Decree, in fact, at least as far as art. 5 is concerned, essentially introduces the regulation of the Guidelines into Ministerial Decree 226/2011.

On 1st October 2015, Ascopiave actually filed an appeal against the above-mentioned Decree as well, with "additional grounds" with respect to the main appeal.

The hearing is scheduled for 28th April 2016. The Company has therefore filed its rejoinder and replication to ministerial pleadings.

AEEGSI RESOLUTIONS ARG/GAS 310/2014 and ARG/GAS 414/2014

An appeal to the Regional Administrative Court of Lombardy – Milan against the AEEGSI, for the cancellation of the Resolutions ARG/gas 310 and 414/2014 related to the methods for assessing the RAB RIV delta, pursuant to art. 15, paragraph 5 of Legislative Decree 164/2000 (current text) when the difference is higher than 10%. To date, there are no further procedural steps.

AEEGSI RESOLUTION ARG/GAS 367/2014

An appeal to the Regional Administrative Court of Lombardy – Milan against the AEEGSI, for the cancellation of Resolution ARG/gas 367/2014 related to the methods for recognising the value of the RAB RIV delta in the section which envisages different regulations for incumbent (no reimbursement) and non-incumbent (full reimbursement) winners of the Territorial tender.

With Judgement no. 2221/2015 filed on 19th October 2015, the Regional Administrative Court, confirming the previous (already reported) Judgement 1396/2015, rejected the appeal. Ascopiave is currently assessing if an Appeal is appropriate.

As far as the most impactful aspects are concerned, the Judgement has recognised the legitimacy of the asymmetric regulatory solution adopted by AEEGSI, according to which for each municipal installation, the local net invested capital (RAB), recognised to the winner of the territorial tender, will be equal to:

• − The reimbursement value of the above-mentioned installation, when the new operator differs from the outgoing operator;
• − The amount currently recognised by virtue of the current municipal concession, if the new operator coincides with the outgoing operator.

The symmetric regulatory solution shall only apply for the duration of the first territorial concession.

With deed notified on 18th January 2016, Ascopiave S.p.A. filed an appeal.

On 8th February 2016, the Council of State scheduled the interlocutory hearing for 31st March 2016, during which the lawyers of the company requested to arrange the merit hearing at the earliest possible date (the application for interim relief was in fact primarily aimed at expediting the proceedings as much as possible). The Council of State has scheduled the discussion for 24th November 2016.

CATEGORY V –CIVIL LITIGATIONS – NOT CONCERNING CONCESSIONS

As of 31st March 2016, the following litigations are pending:

ASCOPIAVE – UNIT B:

A civil Judgement before the Court of Treviso (RG 6941/2013) following the pre-trial technical investigation, which ended with the report of the Expert witness (appointed by the Court), and started by Ascopiave (writ of summons dated 22nd August 2013) in order to obtain compensation for damages to the entrance floor of the "Unit B", against: Bandiera Architetti S.R.L (Designers), Mr. Mario Bertazzon (Contract Manager) and Mr. R. Paccagnella Lavori Speciali S.R.L. (Contractor).

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The compensation request refers to an assessment of damage between approximately Euro 127 thousand (Expert witness estimate for full restoration) and Euro 208 thousand (estimate of a Third party firm for full makeover).

All the Parties regularly appeared before the Court.

The Court, by Order dated 22nd December 2014, decided the complete renewal of the expert witness board, appointing an assessor. The appointment was confirmed in the hearing held on 13th March 2015. Ascopiave S.p.A. has appointed its own expert.

The Court-appointed Expert witness, upon the conclusion of the assignment, assessed that the damage suffered by Ascopiave S.p.A. amounts to approximately Euro 120 thousand.

Based on the findings contained in the technical report, on 29th March 2016 an attempt was made to reach settlement in court, during which the company requested, in addition to the amount determined by the Court-appointed Expert witness, the reimbursement of the costs incurred due to the litigation. The attempt failed basically because an agreement was not reached regarding the subdivision of the amount between the debtors. The Parties are currently awaiting the ruling of the Judge.

ASCOPIAVE – SIDERA/FAJ COMPONENTS:

A civil lawsuit (possession action) before the Court of Treviso (RG 7655/2015), filed by Ascopiave S.p.A. against the companies Sidera and Faj Components, subsequent to the construction, by Sidera and Faj Components, of a new technological building (replacing a former silo), located south of Ascopiave S.p.A.'s property, which does not comply with the minimum distances and the previous transaction existing between the Parties. Aspects connected with personnel and facility safety are also contested.

The Judge has appointed an Expert Witness. The Parties are currently awaiting his/her report.

In the meantime, a discussion also solicited by the court-appointed Expert Witness has been initiated in order to reach a settlement.

Relationships with Agenzia delle Entrate (Tax collection agency)

During 2008, the subsidiary company Ascopiave S.p.A. was subject to tax audit by the Regional Inland Revenue Office. Following the audit, a report on findings with observations on the indirect and direct taxes was issued. During the month of July 2008, the local Internal Revenue Office issued a notice of assessment regarding the contents of the report on findings.

The company, on 5th February 2010, filed an appeal to the Provincial Tax Commission and paid the sum of Euro 243 thousand following the entry in taxpayers' list while the Judgement is pending.

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On 30th September 2010 the Tax Commission of the Province of Treviso with judgement 131/03/10 filed on 14th December 2010 accepted the appeal and acknowledged the good tax behaviour of the company.

Later, Agenzia delle Entrate filed an appeal against the decision of the Commission of the Province of Treviso.

On 24th September 2012, the Regional Provincial Tax Commission issued judgement no. 109/30/12, filed on 20th December 2012 which rejected the appeal submitted by Agenzia delle Entrate, thus confirming the judgement of the Court of first instance.

On 26th June 2013, the company Ascopiave S.p.A. was notified about the appeal in Cassazione (Court of Cassation) by the Inland Revenue Agency and joined proceedings because of the result of previous judgements. The directors, encouraged by the opinion of the professionals consulted, are confident about a positive result of the litigation.

Territorial areas

In 2011, the issuance of a number of ministerial decrees further defined the regulatory framework of the sector, regarding in particular the territorial calls for tenders.

Specifically:

• 1) the Decree dated 19th January 2011 issued by the Ministry for economic Development in agreement with the Ministry for the Relationship with Regions and Territorial Cohesion, the territorial areas for issuing calls for tenders to entrust the gas distribution service were identified; with subsequent Decree dated 18th December 2011, the municipalities belonging to each territorial area were also identified (the so-called Territorial Areas Decree);
• 2) the Decree issued by the Ministry for Economic Development and the Ministry of Employment and Social Policies on 21st April 2011 contained provisions ruling the social effects connected to the assignment of the new gas distribution concessions, thus implementing paragraph 6 of art. 28 of Legislative Decree no. 164 issued on 23rd May 2000 (the so-called Workforce Protection Decree);
• 3) with the Decree issued by the Ministry for Economic Development on 12th November 2011, the regulatory norms concerning the criteria to be applied to calls for tenders and the evaluation of the offer for assigning the gas distribution service was approved (the so-called Decree for Criteria).

The issuance of ministerial decrees played a major role in giving certainty to the competitive environment within which operators will move in the coming years, thus laying the foundations for allowing the process of market opening - that started with the implementation of European directives - to produce the benefits hoped for.

The Ascopiave Group - as indeed many other operators - has substantially appreciated the new regulatory framework, believing that it can create important opportunities of investment and development for medium-sized qualified operators, rationalising the offer.

At the end of 2013, the Government issued Law Decree 23/12/2013, no. 145, making changes to the regulatory framework with regard to the determination of the reimbursement value of the plants due to the outgoing operator at the end of the so-called "Transitional Period". The Decree was converted with amendments into Law no. 9 / 2014, which substantially changed the original provisions of the Decree on that aspect.

The conversion into Law of the Decree (Law no. 9 / 2014) has made substantial changes to Article 15 of Legislative Decree no. 164/2000, providing that the new operators shall pay a reimbursement to the holders of assignments and concessions existing in the transitional period, calculated in compliance with the provisions of the agreements or

contracts and, even if not inferable by the will of the Parties and for aspects which are not envisaged in those agreements or contracts, based on guidelines on operating criteria and methods for the assessment of the reimbursement value as per article 4, paragraph 6, of Law Decree dated 21st June 2013, no. 69, converted, with amendments, by Law dated 9th August 2013, no. 98. In any case, private contributions related to local assets (assessed in accordance with the methodology of tariff regulation in force) have to be deducted from the reimbursement value. If the reimbursement value is higher than 10% of the value of local assets calculated as per tariff regulation, net of public capital contributions and of private ones for local fixed assets, the granting local body submits the related evaluations detailing the reimbursement value to the Authority for Electricity and Gas and Water Supply System so that it can be checked before publishing the invitation to tender.

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In addition, Law no. 9/2014 has established that the deadlines envisaged in paragraph 3 of article 4 of Law Decree dated 21st June 2013, no. 69, converted, with amendments, by Law dated 9th August 2013, no. 98, are extended by four months and that the deadlines illustrated in Attachment 1 to the regulations of the Minister for Economic Development Decree dated 12th November 2011, no. 226 (so-called "Decree for Criteria"), related to dispositions contained in the third grouping of Attachment 1 itself, and the deadlines illustrated in article 3 of the regulations, are extended by four months.

On 6th June 2014 the Decree of the Minister of Economic Development dated 22nd May 2014 was published in the Official Gazette, which approved the "Guidelines for criteria and application procedures for the assessment of the reimbursement value of natural gas distribution networks" pursuant to Article 4, paragraph 6, of Law Decree no. 69/2013, converted with amendments by Law no. 98/2013 and article 1, paragraph 16, of Law Decree no. 145/2013, converted with amendments into Law no. 9/2014. Pursuant to Law no. 9/2014, the "Guidelines for criteria and application procedures for the assessment of the reimbursement value of natural gas distribution networks" define the criteria to be applied to the valuation of reimbursement of facilities in order to integrate those aspects that are not already provided for in the agreements or contracts and what cannot be deduced from the will of the parties.

The "Guidelines" feature several critical issues not only as concerns the resulting valuations, but also in terms of application scope, extremely extended by the Ministry, to the extent that all the agreements regarding the valuations of the facilities entered into by the operators and the Municipalities after 12th February 2012 (date of entry into force of Ministerial Decree 226/2011) are believed to be ineffective.

Furthermore, these Guidelines contrast with the provisions of art. 5 of Ministerial Decree 226/2011 itself. This is in non-compliance with the provision of law which refers to art. 4, paragraph 6 of Law Decree 69/2013, which, in turn, makes explicit reference to Article 5 of Ministerial Decree 226/2011.

Considering such illegitimacies, Ascopiave S.p.A. has appealed the Ministerial Decree dated 21st May 2014 (and as a consequence the Guidelines) before the administrative court (Regional Administrative Court of Latium). As part of the said proceedings, the issue of constitutional legitimacy and/or preliminary ruling was raised relating to the interpretation (mainly retrospective) of the new rules on the deduction of private contributions set forth by Law 9/2014.

Lastly, by Resolution 310/2014/R/gas - "Provisions for determining the reimbursement value of natural gas distribution networks", published on 27th June 2014, the Authority for Electricity, Gas and Water approved provisions for determining the reimbursement value of the gas distribution networks, implementing the provisions of Article 1, paragraph 16 of Law Decree dated 23rd December 2013, no. 145, converted with amendments by Law dated 21st February 2014, no. 9.

That provision states that the granting Local Authority shall send the Authority the verification documents containing a

detailed calculation of the reimbursement value (RIV), if this value is 10% higher than the local RAB.

The Authority performs the checks set forth in Article 1, paragraph 16 of Law Decree no. 145/13 within 90 days from the date of receipt of the documentation by the Awarding entities, ensuring priority based on the deadlines for the publication of the calls for tenders.

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With Law no. 116/2014 dated 11th August 2014 (converted with amendments to law decree 24th June 2014 no. 91) the Legislator has envisaged a further extension of deadlines for the publication of invitations to tender. Specifically, for the areas belonging to the first group referred to in Annex 1 of Ministerial Decree 226/2011, the time limit was extended by eight months; for the areas belonging to the second, third and fourth groups the deadline was postponed by six months and lastly for the areas of the fifth and sixth groups the extension is four months.

However, these postponements do not apply to those areas which, although they belong to the first six groups, are affected by earthquakes, because over 15% of the redelivery points are in the municipalities affected by the earthquakes of 20th and 29th May 2012, in compliance with the annex to the Decree of the Minister of economy and finance dated 1st June 2012.

The same law, further amending Article 15, paragraph 5 of Legislative Decree 2000, has finally determined that the redemption value is to be calculated in compliance with the provisions of the agreements or contracts, provided that the latter were entered into before the date of entry into force of Ministerial Decree dated 12th November 2011 no. 226, that is to say before 12th February 2012, thus affirming the principle of retroactive application of the Guidelines, which had already been appealed during the court action against the Guidelines.

On 14th July 2015, the Decree of the Minister of Economic Development and the Minister of Regional Affairs and Autonomies no. 106 dated 20th May 2015 was published in the Official Gazette, amending the decree dated 12th November 2011 no. 226 regarding the tender criteria for awarding the gas distribution service.

The most significant changes include:

• 1) the provisions concerning the value of the reimbursement of the plants to be applied in case of absence of specific agreements between the parties occurred before the entry into force of Decree no. 226/2011, which include to a large extent the provisions of the "Guidelines".
• 2) a higher maximum threshold for the amount of the annual payments that may be offered in tenders to local authorities. This threshold, previously equal to 5% of the portion of the restriction on tariff revenues to cover the local capital costs, has been brought to 10%;
• 3) the treatment of a number of important technical and economic aspects related to the tendered energy efficiency investments, concerning the value of the amounts to be paid to local authorities and the payments to cover the costs of the operator which implements the interventions and gains the related energy efficiency certificates.

Finally, the conversion into Law of the so-called "Decreto Mille Proroghe" (Law no. 21 dated 25/02/2016) provides for a further extension of the deadlines for the publication of invitations to tender. Specifically, for the areas belonging to the first group as described in Annex 1 of Ministerial Decree 226/2011, the deadline is further postponed by 12 months; for the areas belonging to the second group, by 14 months; for those belonging to the third, fourth, and fifth group, by 13 months; for the areas belonging to the sixth and seventh grouping, 9 months; 5 months for the areas of the eighth group.

The same regulation establishes the deadlines within which the Regions, or, as a last resort, the Ministry of Economic Development, should intervene, and repeals the penalties previously incurred by the Municipalities for the delay.

In 2015, a number of tenders were published for the award of the service with Territorial procedure. Many of them did not follow the procedures required by law, which envisages, among other things, the prior examination by the Authority of the reimbursement amounts of the plants due to outgoing operators as well as the review of the invitation to tender's overall content and annexes before publication. Moreover, most calls are also inconsistent, even significantly, with the instructions contained in the ministerial regulations, also with regard to the criteria for evaluating bids; according to the current regulations, such inconsistencies should be specifically justified by the Awarding Entities.

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In this context, the standardisation of the tender process envisaged by the law is encountering serious difficulties, to the extent that the procedures may freeze due to a major litigation.

Distribution of dividends

On 28th April 2016, the Shareholders' Meeting approved the yearly statement and decided the distribution of dividends for an amount equal to Euro 0.15 per share with dividend date on 9th May 2015, record date on 10th May 2015 and payment on 11th May 2015.

Own shares

In accordance with Art. 40 of Legislative Decree 127 2 d), as of 31st March 2016, the value of own shares held by the company is equal to Euro 17,521 thousand (Euro 17,521 thousand as of 31st December 2015), as can be seen in the Net Equity variations.

Outlook for the Year

As far as the gas distribution activities are concerned, in 2016 the Group will continue its normal operations and service management and perform preparatory activities for the invitations to tender. The Group will also participate in the tenders invited, if any, for the award of the Minimum Territorial Areas in which it is interested. Most Municipalities currently managed by the Ascopiave Group belong to Minimum Territorial Areas for which the maximum deadline to issue the call for tenders exceeds 31st December 2016. However, since tender authorities may anticipate the maximum terms stated in the regulations, it is possible that some Municipalities may be interested in tenders already in 2016. If this should be the case, however, even with no certainties concerning the required time for the assignment, it is reasonable to assume that, for the first call for tenders, possible transfers of management to potential new operators may be executed only after the end of 2016. Thus, the activity perimeter of the Group will likely not change compared to today.

As far as profitability is concerned, it will be negatively affected by the adjustment of the capital return rate envisaged in the recent tariff measures; in fact, the actual pre-tax rate of return for the distribution activity was reduced from 6.9% in 2015 to 6.1%, thus determining an expected decrease in global tariff revenues.

As far as gas sale is concerned, it is even more difficult to forecast result trends, also due to the impact of weather conditions, which significantly affect gas consumption. However, for the time being there is no reason to believe that in the near future there will be considerable variations in business profitability conditions, despite the competitive pressure in the retail market and the expected impact of the tariff measures defined by AEEGSI for the protected market. As regards electricity sales, the fiscal year 2016 could confirm 2015 results.

However, these results could be influenced, in addition to the possible tariff provisions by the Electricity, Gas and Water System Authority (AEEGSI) – currently unforeseeable – also by the evolution of the more general competitive context, as well as by the Group's procurement strategy.

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The actual results of 2016 could differ compared to those announced depending on various factors amongst which: the evolution of supply and demand and gas prices, the actual operational performance, the general macroeconomic conditions, the impact of regulations in the energy and environmental fields, success in the development and application of new technologies, the changes in stakeholder expectations and other changes to business conditions.

Goals and policies of the group and risk description

Credit and liquidity risk

The main financial instruments in use by our Group are represented by liquidity, bank debt and other forms of financing. It is maintained that the Group is not exposed to credit risks greater than the product sector average, considering the numerous customers and the low physical risk in the service of gas delivery. To keep residual credit risks under control, there is in any case a fund for the devaluation of credit equal to approximately 7.1% (12.9% as of 31st March 2015) of the total gross credit of third parties. Significant commercial operations take place in Italy. With reference to the company financial management, the administrators consider it appropriate to generate a cash flow suitable for covering its needs.

The main payment obligations opened as of 31st March 2016 are associated with contracts for natural gas supply.

Risks relating to bids for the award of new concessions for the distribution of natural gas

As of 31st March 2065, the Ascopiave Group holds a portfolio of 208 (208 as of 31st December 2015) natural gas distribution concessions located throughout the country. In compliance with the regulations in force governing the concessions held by the company, the calls for tenders for the new awards of the gas distribution service will be no longer announced for every single Municipality but exclusively for the territorial areas determined with Ministerial Decrees dated 19th January 2011 and 18th October 2011, and pursuant to the deadlines illustrated in Annex 1 attached to the Ministerial Decree on tender criteria and bid assessment standards, issued on 12th November 2011. With new tenders being launched, Ascopiave S.p.A. may not be able to obtain one or more new concessions, or it could obtain them at less advantageous conditions than the current ones, with possible negative impacts on the operative activity and the economic, equity and financial situation, it being understood that, if the company is not awarded with a new concession, limited to the Municipalities previously managed by the company, it will obtain a reimbursement value envisaged for the outgoing operator.

Risks relating to the amount of reimbursement paid by the new operator

With regard to the concessions under which the Ascopiave Group also owns the gas distribution networks, Law no. 9 / 2014 establishes that the new operator shall pay a reimbursement calculated in compliance with the provisions of the agreements or contracts and, even if not inferable by the will of the Parties and for aspects which are not envisaged in

those agreements or contracts, based on guidelines on operating criteria and methods for the assessment of the reimbursement value as per article 4, paragraph 6, of Law Decree dated 21st June 2013, no. 69, converted, with amendments, by Law dated 9th August 2013, no. 98. In any case, private contributions related to local assets (assessed in accordance with the methodology of tariff regulation in force) have to be deducted from the reimbursement value. In addition, if the reimbursement value is higher than 10% of the value of local assets calculated as per tariff regulation, net of public capital contributions and of private ones for local fixed assets, the granting local body submits the related evaluations detailing the reimbursement value to the Authority for Electricity and Gas and Water Supply System so that it can be checked before publishing the invitation to tender.

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The Minister for Economic Development Decree dated 12th November 2011 no. 226 establishes that the new operator acquires the property of the plant by paying the redemption value to the outgoing operator, except for any portion of it owned by the municipality.

In the periods following the first, transitional one, the reimbursement value to the outgoing operator shall be equal to the local net intangible assets, net of public capital contributions and of private ones for local fixed assets, calculated with reference to the criteria used by the Authority to determine the distribution tariffs (RAB). As far as this point is concerned, it should be noted that the Authority has recently intervened with Resolution 367/2014/R/gas, providing that the redemption value, referred to in Article 14, paragraph 8, of Legislative Decree no. 164/00, at the end of the first period of concession is determined as the sum of: a) the residual value of the existing stock at the beginning of the concession period, assessed for all the fixed assets subject to transfer for consideration to the new operator in the second period of concession based on the redemption value, provided for in Article 5 of Decree 226/11, recognised to the outgoing operator in the first territorial concession, taking into account the depreciations and divestments recognised for tariff purposes in the concession period; b) the residual value of the new investments made in the concession period and existing at the end of the period, assessed based on the re-valued historical cost method for the period in which the investments are recognised in the final balance, as provided in Article 56 of the Tariff Regulation of Gas Distribution and Measurement Services, and as the average between the net value determined based on the re-valued historical cost method and the net value determined based on standard cost assessment methods, pursuant to paragraph 3.1 of Resolution 573/2013/R/GAS, for the next period.

The Group is protecting its financial performance and standing with respect to adverse regulatory changes as described in the terms set out in the sections "Territorial areas" and "Litigations" of this report.

Evolution of the APR mechanism

AEEGSI, by virtue of law no. 481/95, is responsible for monitoring the price levels of natural gas, and for defining the economic conditions for the supply of gas to customers who are entitled to the protection service. The decisions made by AEEGSI as regards such matters may limit the ability of the gas operators to transfer the increases in raw material cost to the final price. The customers entitled to the protection service are households and condominiums with residential purposes consuming less than 200 thousand cubic meters/year.

In 2013, the Authority for electricity, gas and water (AEEGSI – "Authority") reformed the structure of gas tariffs intended for protected customers in the civil segment with the introduction of the hub indexation of the component to cover the cost of raw material – forward prices recorded at the TTF Dutch hub – instead of the previous indexation, mostly oil-linked, in a market where hub gas prices were significantly lower than the oil-indexed prices of long-term agreements. In this context, the Authority introduced, with Resolution 447/2013/R/gas, among the compensation instruments for the operators which had signed long-term agreements, an optional mechanism "to promote the

renegotiation of long-term procurement agreements". This compensation mechanism, based on the so-called APR (amount pro renegotiation), has two aims: on the one hand it ensures these operators, which had entered into long-term (typically oil-linked) procurement agreements, a gradual transition to the new price system, by offsetting part of the higher long-term procurement costs which are no longer recoverable through the tariff; on the other hand it safeguards protected customers in the event of a trend reversal of gas spot prices and long-term formulas in the three years after the reform. The reference period of the APR mechanism corresponds to the three thermal years 2014/2016.

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The initial amount of the compensation was decided by the Authority in 2013 for each operator on the basis of the documentation submitted, considering the differential between the average theoretical efficient cost of long-term agreements (so-called Ptop) and the price expressed by the hub market (TTF reference), leaving to the operators' discretion whether or not to adopt it. The Authority has determined (with reference to the volumes of the Ascopiave Group and a forward reading of the price formulas) a maximum total compensation for the three years of validity of the mechanism equal to Euro 11.2 million. The resolution envisaged a financial settlement of the consideration with a proportion, over the three thermal years considered, equal to 40/40/20%. The mechanism involved an updating process of the APR in the three years aimed at confirming the value originally envisaged, or, in the event of reversal of procurement price and spot price, a return to end customers up to 3 times the amount initially defined: about Euro 33.5 million. In particular, the downward trend would have been activated if the long-term procurement price had been lower than the spot price, according to the indicators and procedures set forth in Resolution 447/2013/R/GAS. The Ascopiave Group at first did not adopt the APR mechanism because of unfavourable operating conditions, challenging the measure before the Regional Administrative Court of Lombardy, requesting a stay.

It being understood that the Ascopiave Group did not deem it appropriate to adopt the APR mechanism in the previous two years, even if it had entered into long-term procurement agreements through the associate Sinergie Italiane S.r.l. in liquidation, and that during the third quarter of 2015 it finalised the renegotiation of the formulas that regulate natural gas procurement prices, the Group decided to reconsider the position originally taken.

The evolution of the general conditions of the natural gas market, the effect deriving from the renegotiation of the indexing formulas of the Group's long-term agreement and the reasonable scenarios prepared by the management, have shown that the risk of suffering financial losses caused by the adoption of the aforesaid mechanism is remote. Rather, the same scenarios have highlighted a possible loss of future economic opportunities if the mechanism is not adopted. Given the reasonableness of the scenarios developed, in the fourth quarter of 2015, the Group decided to adopt the APR mechanism and the economic effects resulting from this mechanism will be reported in the financial statements in accordance with the future AEEGSI deliberations on the matter. In November 2016, the Authority will determine the results of the incentive mechanism for promoting the renegotiation of long-term procurement agreements; the AEEGSI will therefore update for the third and last time the Ptop index for the thermal year 2016.

The Group, even if the Regional Administrative Court of Lombardy has rejected the appeal through which the Group had challenged the functioning of the original mechanism for the renegotiation of natural gas long-term procurement agreements, will consider whether to appeal before the Council of State the negative judgement of the Regional Administrative Court of Lombardy, in order to protect its legitimate interests.

Evolution of the adjustment sessions of natural gas allocations

At the closing date of the Interim Report as of 31st March 2016, the regulatory framework is unchanged as compared to the scenario described in section "Assessment criteria" of the yearly financial statements as of 31st December 2015. The adjustment sessions of natural gas allocations are still suspended in compliance with the provisions of the Authority for

Electricity, Gas and Water contained in Resolution 276/2015/R/GAS dated 9th June 2015. As of 31st March 2016, the Group is exposed to the positive and negative economic effects arising from the probable modification of the allocated volumes and the volumetric differences that are naturally formed in different parts of the network where natural gas is measured. In this regard, it should be noted that the economic effects that the Group has recorded as a result of the failure to perform the adjustment session affect the financial years 2013 and 2014 as well as the effects accrued in 2015 and the first quarter of 2016.

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Based on current regulations or conventions, it is not possible to establish when the results of the first valid adjustment session will be made available to the public.

Additional information

Seasonal nature of the activity

Gas consumption varies considerably on a seasonal basis, with a higher demand during winter, in relation to higher consumption for heating. Such seasonal nature influences the rise in gas sales and supply costs, while other management costs are fixed and evenly supported by the Group during the year. The seasonal nature of the activity also affects the performance of the Group's net financial position, as the active and passive billing cycles are not aligned with each other and also depend on the performance of gas volumes sold and purchased during the year. Therefore, the data and information contained in the interim financial statements do not allow to draw meaningful conclusions as to the overall trend of the year.

Performance Indicators

According to Consob communication DEM 6064293 dated 28th July 2006 and by recommendation CESR/05-178b on alternative performance indicators, we specify that besides normal performance indicators fixed by International Accounting Principles IAS/IFRS, the Group considers useful for its business monitoring activity, the use of other performance indicators, which, even if they do not appear yet in the afore-stated principles, have a considerable importance. In particular, we introduced the following indicators:

• Gross operative spread (Ebitda): defined by the Group as the result of amortisations, credit depreciation, financial managing and taxes;
• Operating result: this indicator is accounted for by the accounting principles we refer to, and it is defined as operative spread (Ebit) minus the balance of costs and non-recurrent revenues. This last item includes extraordinary incomes and losses, appreciations and capital losses for alienation of assets, insurance reimbursements, taxes and others positive and negative components with less relevance.
• Revenues from the tariff on the activity of gas distribution: defined by the Group as the amount of revenue realised by the distribution companies of the Group for the implementation of tariffs for distribution and measurement of natural gas to their end customers, net of amounts equalisation managed by the Electricity Equalisation Fund (Cassa Conguaglio per il Settore Elettrico);
• First margin on gas sales: the Group defines it as the amount obtained from the difference between the sales proceeds (realised by the Group's sale companies to end customers or final market within the business of trading and selling as a wholesaler) and the sum of the following costs: the cost of transmission service (gross

of amounts subject to elimination and distribution tariffs applied by the distribution companies) and the purchase cost of gas sold;

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• First margin on electric power sale: the Group defines it as the amount obtained from the difference between the proceeds of sale of electricity and the sum of the following costs: cost of transport services, dispatching and balancing cost and purchase of electricity sold.

Comments on the economic and financial results of the first quarter of 2016

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General operational performance and indicators

NATURAL GAS DISTRIBUTION	I trim 2016	I trim 2015	Var.	Var. %
Companies consolidated with full consolidation method
Number of concessions	176	176	0	0.0%
Length of distribution network (km)	7,792	7,703	89	1.2%
Volumes of gas distributed (scm/mln)	339.4	336.1	3.3	1.0%
Companies consolidated with net equity consolidation method
Number of concessions	32	32	0	0.0%
Length of distribution network (km)	1,102	1,094	8	0.7%
Volumes of gas distributed (scm/mln)	68.5	69.1	-0.7	-1.0%
Ascopiave Group*
Number of concessions	192	192	0	0.0%
Length of distribution network (km)	8,330	8,237	93	1.1%
Volumes of gas distributed (scm/mln)	372.8	369.9	2.9	0.8%

* Operating data of companies consolidated with net equity consolidation method are considered pro-quota

NATURAL GAS SALES TO FINAL MARKET	I trim 2016	I trim 2015	Var.	Var. %
Companies consolidated with full consolidation method
Volumes of gas sold (smc/mln)	349.1	378.3	-29.2	-7.7%
Companies consolidated with net equity consolidation method
Volumes of gas sold (smc/mln)	131.8	146.3	-14.6	-10.0%
Ascopiave Group*
Volumes of gas sold (smc/mln)	413.6	450.0	-36.4	-8.1%

* Operating data of companies consolidated with net equity consolidation method are considered pro-quota

SALE OF ELECTRIC POWER	I trim 2016	I trim 2015	Var.	Var. %
Companies consolidated with full consolidation method
Volumes of electricity sold (GWh)	84.1	91.5	-7.4	-8.1%
Companies consolidated with net equity consolidation method
Volumes of electricity sold (GWh)	28.2	36.6	-8.3	-22.8%
Ascopiave Group*
Volumes of electricity sold (GWh)	98.0	109.4	-11.5	-10.5%

* Operating data of companies consolidated with net equity consolidation method are considered pro-quota

Comments on the trend of the main operational indicators of the Group's activity are reported below:

The value of each indicator is obtained by adding the values of the indicators of each consolidated company, weighting the data of the companies consolidated with the equity method according to the share of consolidation.

As far as the activity of gas distribution is concerned, in the first quarter of 2016, the volumes distributed through the networks managed by the fully consolidated companies of the Group totalled 339.4 million cubic metres, increasing by 1.0% compared to the same period of the previous year.

The company Unigas Distribuzione S.r.l., consolidated through the net equity method, distributed 68.5 million cubic metres, decreasing by 1.0% as compared to the first quarter of 2015.

The volume of gas sold by the fully consolidated companies during the first quarter of 2016 amounted to 349.1 million cubic metres, marking a decrease of 7.7% as compared to the same period of the previous year. In the first quarter of

2016 the companies consolidated through the net equity method (Estenergy S.p.A. and ASM Set S.r.l.) globally sold 131.8 million cubic metres (-10.0% as compared to the same period of the previous year).

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In the first quarter of 2016, the volume of electricity sold by the fully consolidated companies was equal to 84.1 GWh, marking a decrease of 8.1% as compared to the same period of the previous year. In the first quarter of 2016 the companies consolidated through the net equity method (Estenergy S.p.A. and ASM Set S.r.l.) globally sold 28.2 GWh of electrical energy.

General operational performance - The Group's economic results

	1st Quarter 2016 % of revenues		1st Quarter 2015	% of
(Thousands of Euro)				revenues
Revenues	182,512	100.0%	219,496	100.0%
Total operating costs	146,508	80.3%	185,188	84.4%
Gross operative margin	36,004	19.7%	34,307	15.6%
Amortization and depreciation	5,084	2.8%	4,830	2.2%
Provision for risks on credits	616	0.3%	835	0.4%
Operating result	30,304	16.6%	28,642	13.0%
Financial income	126	0.1%	386	0.2%
Financial charges	237	0.1%	458	0.2%
Evaluation of subsidiary companies with the net equity method	3,587	2.0%	3,452	1.6%
Earnings before tax	33,780	18.5%	32,022	14.6%
Taxes for the period	9,642	5.3%	9,190	4.2%
Net result for the period	24,138	13.2%	22,832	10.4%
Group's Net Result	22,651	12.4%	21,394	9.7%
Third parties Net Result	1,487	0.8%	1,438	0.7%

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In accordance with CONSOB communication DEM/6064293 dated 28th July 2006, the alternative performance indicators are defined in paragraph "Performance Indicators" of the present report.

In the first quarter of 2016, the Group incomes amount to Euro 182,512 thousand, decreasing by 16.8% as compared to the same period in the previous financial year. The following table reports the details of income.

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Revenues from gas transportation	12,425	11,173
Revenues from gas sale	148,358	187,937
Revenues from electricity sale	15,446	15,753
Revenues from connections	29	140
Revenues from heat supply	37	9
Revenues from distribution services	1,483	878
Revenues from services supplied to Group
companies	310	193
Revenues from AEEG contributions	3,052	2,082
Other revenues	1,373	1,330
Revenues	182,512	219,496

The revenues from gas sale decrease from Euro 187,937 thousand to Euro 148,358 thousand, thus recording a decrease of Euro 39,578 thousand (-21.1%). The variation is mainly due to lower volumes of gas sold and the decrease in unit sales prices.

Revenues from electricity sales decreased from Euro 15,753 thousand to Euro 15,446 thousand, marking a decrease of Euro 306 thousand (-1.9%), mainly due to lower volumes of electricity sold.

The operating result for the first quarter of 2016 amounts to Euro 30,304 thousand, thus recording an increase of Euro 1,662 thousand (+5.8%) as compared to the same period in the previous year.

The improvement is due to several factors:

• decrease in the tariff revenues on the activity of gas distribution for Euro 333 thousand;
• increase in the first margin on the activity of gas sales, equal to Euro 857 thousand;
• increase in the first margin on the activity of electricity sale, equal to Euro 424 thousand;
• positive variation in other items of cost and revenues, equal to Euro 714 thousand.

The decrease in the revenues from tariffs in the gas distribution activity (decreasing from Euro 15,176 thousand to Euro 14,843 thousand) is due to the entry into force of the new tariff regulation for the period 2014-2019 (so-called fourth regulatory period) envisaged by AEEGSI resolution 367/2014/R/gas.

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The increase in the first margin on the activity of gas sale (from Euro 31,536 thousand to Euro 32,393 thousand), is mainly due to an increase in average unit sale prices, offset by lower volumes of gas sold.

The increase in the first margin on the activity of electricity sales, from Euro 1,016 thousand to Euro 1,441 thousand is due to higher unit margins and lower amounts of electricity sold.

The positive variation in the item other costs and revenues, amounting to Euro 714 thousand, is mainly due to:

• higher other revenues for Euro 1,648 thousand;
• higher material and service costs and other charges equalling Euro 970 thousand;
• lower personnel cost for Euro 70 thousand;
• higher amortisation of fixed assets for Euro 254 thousand;
• lower bad debts provisions for Euro 219 thousand.

The net consolidated profit for the first quarter of 2016 amounts to Euro 24,138 thousand, thus recording an increase of Euro 1,306 thousand (+5.7%) compared to the same period in the previous year.

The variation is due to the following factors:

• an increase in the operating result, as previously stated, for Euro 1,662 thousand;
• higher result of companies consolidated through the equity method for Euro 135 thousand;
• decrease in financial revenues for Euro 260 thousand;
• decrease in financial charges for Euro 221 thousand;
• increase in taxes for Euro 452 thousand, due to the increase in the taxable income.

The tax rate, calculated by normalising the pre-tax result of the effects of consolidation of the companies consolidated using the equity method, decreases from 32.2% to 31.9%.

General operational performance – Financial situation

The table below shows the composition of the net financial position as requested in Consob communication no. DEM/6064293 dated 28th July 2006:

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(Thousands of Euro)	31.03.2016	31.12.2015	31.03.2015
A Cash and cash equivalents on hand	14	15	20
B Bank and post office deposits	27,809	28,286	67,607
D Liquid assets (A) + (B) + (C)	27,823	28,301	67,627
E Current financial assets	659	3,487	2,919
F Payables due to banks	(46,322)	(88,238)	(121,839)
G Current portion of medium-long-term loans	(9,628)	(9,628)	(9,746)
H Current financial liabilities	(721)	(3,708)	(281)
I Current financial indebtedness (F) + (G) + (H)	(56,671)	(101,574)	(131,865)
J Net current financial indebtedness (I) - (E) - (D)	(28,189)	(69,786)	(61,319)
K Medium- and long-term bank loans	(42,042)	(43,829)	(51,671)
L Non current financial assets	0	0	3,124
M Non-current financial liabilities	(404)	(422)	(3,310)
N Non-current financial indebtedness (K) + (L) + (M)	(42,447)	(44,250)	(51,857)
O Net financial indebtedness (J) + (N)	(70,635)	(114,037)	(113,176)

In accordance with CONSOB resolution no. 15519 dated 27th July 2006, the effects of the transactions with related parties are highlighted in the table in paragraph "Transactions with related parties" of this financial report.

The financial position decreased from Euro 114,037 thousand of 31st December 2015 to Euro 70,635 thousand as of 31st March 2016, reporting an increase of Euro 43,401 thousand.

In order to comply with Consob communication no. DEM/6064293/2006, the following table shows the reconciliation between the Net financial position and the ESMA Net financial position:

(Thousands of Euro)	31.03.2016	31.03.2015
Net financial position	(70,635)	(113,176)
Non current financial assets	0	3,124
Net financial position ESMA	(70,635)	(116,300)

The financial position decreased from Euro 113,176 thousand as of 31st March 2015 to Euro 70,635 thousand as of 31st March 2016, reporting an increase of Euro 42,541 thousand. As of 31st March 2015, other non-current liabilities amounted to Euro 3,124 thousand, related to the item "non-current financial receivables" explained by the aggregation of Veritas Energia S.r.l..

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Some figures relating to the financial flows of the Group are reported below:

Ascopiave Group

(Thousands of Euro)	31.03.2016	31.12.2015
Net Income	24,138	45,362
Depreciations and amortizations	5,084	20,029
Provisions	616	4,004
(a) Self financing	29,838	69,396
(b) Adjustments to reconcile net profit of changes in financial
position generated by operating activities:	17,677	(501)
(c) Change in financial position generated
by operating activities = (a) + (b)	47,514	68,894
(d) Change in financial position generated
by investing activities	(4,113)	(21,892)
(e) Other financial position changes	(0)	(31,366)
Net financial position changes = (c) + (d) + (e)	43,401	15,637

The cash flow generated by the operating management (letters a + b), equal to Euro 47,514 thousand, was mainly due to self-financing for Euro 29,838 thousand and other financial positive variations amounting to Euro 17,677 thousand, mainly related to the management of the net circulating capital for Euro 21,262 thousand and to the assessment of companies consolidated through the equity method for Euro -3,586 thousand.

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Management of net circulating capital has generated financial resources amounting to Euro 21,262 thousand and was influenced mainly by a variation in the overall balance with the Technical Office for Taxation on Building and Regional Taxation, which has generated financial resources for Euro 24,653 thousand, by the variation in VAT allocation, which has generated financial resources for Euro 29,781 thousand, by the variation in the position towards the Inland Revenue for the accrual of IRES and IRAP taxes, which has generated financial resources for Euro 9,447 thousand, and the variation in the net operating capital, which has absorbed financial resources for Euro 48,692 thousand.

The following table shows in detail the changes in the net working capital during the period:

(Thousands of Euro)	31.03.2016	31.12.2015
Inventories	65	(1,095)
Trade receivables and payables	(56,097)	(41,578)
Operating receivables and payables	7,340	5,918
Severance pay and other funds	43	19
Current taxes	7,955	18,519
Taxes paid	0	(13,535)
Tax receivables and payables	61,957	38,368
Non currenti financial assets/(liabilities)	0	(355)
Change in net working capital	21,262	6,262

Investment activities have generated a cash requirement of Euro 4,113 thousand.

General operational performance - Investments

During the first quarter of 2016 the Group made investment for an amount of Euro 4,113 thousand.

The costs incurred for the construction of infrastructures for the distribution of natural gas, amounting to Euro 3,391 thousand, relate to the creation of connections for Euro 1,129 thousand, the construction and maintenance of natural gas

network and distribution systems for Euro 1,213 thousand and the installation/replacement of meters and the installation of correctors for Euro 1,049 thousand.

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	1st Quarter	1st Quarter
INVESTMENTS (thousands of Euro)	2015	2014
Connectrion of end customers to distribution network	1,129	876
Extension, enhancement and upgrading network	1,044	1,062
Gas meters	1,049	950
Maintenance	169	157
Raw material (gas) investments	3,391	3,044
Lands and Buildings	348	38
Industrial and commercial equipment	3	44
Fornitures	1	5
Vehicles	219	0
Hardware and Software	14	21
Other assets	138	25
Other investments	723	133
Investments	4,113	3,178

Ascopiave Group

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Interim Report

as at 31st March 2016

Consolidated assets and liabilities statement

(Thousands of Euro)		31.03.2016	31.12.2015
ASSETS
Non-current assets
Goodwill	(1)	80,758	80,758
Other intangible assets	(2)	315,802	316,659
Tangible assets	(3)	34,873	34,987
Shareholdings	(4)	71,519	68,078
Other non-current assets	(5)	14,820	15,366
Advance tax receivables	(7)	10,848	11,333
Non-current assets		528,620	527,182
Current assets
Inventories	(8)	3,511	3,577
Trade receivables	(9)	213,901	172,022
Other current assets	(10)	30,487	46,518
Current financial assets	(11)	659	3,487
Tax receivables	(12)	1,368	1,368
Cash and cash equivalents	(13)	27,823	28,301
Current assets		277,750	255,272
ASSETS		806,370	782,454
Net equity and liabilities
Total Net equity
Share capital		234,412	234,412
Own shares		17,521	17,521
Reserves		221,191	198,374
Net equity of the Group		438,081	415,264
Net equity of Others		6,380	4,873
Total Net equity	(14)	444,461	420,137
Non-current liabilities
Provisions for risks and charges	(15)	7,215	7,360
Severance indemnity	(16)	3,906	3,864
Medium- and long-term bank loans	(17)	42,042	43,829
Other non-current liabilities	(18)	19,632	18,903
Non-current financial liabilities	(19)	404	422
Deferred tax payables	(20)	19,242	19,571
Non-current liabilities		92,443	93,948
Current liabilities
Payables due to banks and financing institutions	(21)	55,950	97,866
Trade payables	(22)	109,220	122,823
Tax payables	(23)	2,323	397
Other current liabilities	(24)	101,062	43,324
Current financial liabilities	(25)	721	3,708
Current liabilities from derivative financial instruments	(26)	190	252
Current liabilities		269,466	268,370
Liabilities		361,909	362,317
Net equity and liabilities		806,370	782,454

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In accordance with CONSOB resolution no. 15519 dated 27th July 2006, the effects of the transactions with related parties are highlighted in the table in paragraph "Transactions with related parties" of this financial report.

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Income statement and overall consolidated income statement

(Thousands of Euro)		1st Quarter 2016	1st Quarter 2015
Revenues	(26)	182,512	219,496
Total operating costs		147,123	186,023
Purchase costs for raw material (gas)	(27)	97,143	134,435
Purchase costs for other raw materials	(28)	5,034	5,541
Costs for services	(29)	34,263	36,668
Costs for personnel	(30)	5,672	5,742
Other management costs	(31)	5,032	3,643
Other income	(32)	21	5
Amortization and depreciation	(33)	5,084	4,830
Operating result		30,304	28,642
Financial income	(34)	126	386
Financial charges	(34)	237	458
Evaluation of subsidiary companies with the net equity method	(34)	3,587	3,452
Earnings before tax		33,780	32,022
Taxes for the period	(35)	9,642	9,190
Result for the period		24,138	22,832
Group's Net Result		22,651	21,394
Third parties Net Result		1,487	1,438
Consolidated statement of comprehensive income
1. Components that can be reclassified to the income statement
Fair value of derivatives, changes in the period net of tax		187
2. Components that can not be reclassified to the income statement Actuarial (losses)/gains from remeasurement on defined-benefit obligations net of tax
Total comprehensive income		24,325	22,832
Group's overall net result		22,818	21,397
Third parties' overall net result		1,507	1,435
Base income per share		0.102	0.096
Diluted net income per share		0.102	0.096

In accordance with CONSOB resolution no. 15519 dated 27th July 2006, the effects of the transactions with related parties are highlighted in the table in paragraph "Transactions with related parties" of this financial report.

N.b.: Earnings per share are calculated by dividing the net income for the period attributable to the Company's shareholders by the weighted average number of shares net of own shares. For the purposes of the calculation of the basic earnings per share, we specify that the numerator is the economic result for the period less the share attributable to third parties. There are no preference dividends, conversions of preferred shares or similar effects that would adjust the results attributable to the holders of ordinary shares in the Company. Diluted profits for shares result as equal to those for shares in that ordinary shares that could have a dilutive effect do not exist and no shares or warrants exist that could have the same effect.

Statement of changes in shareholders' equity

(thousands of Euro)	Share capital	Legal reserve	Own shares	Reserves IAS 19 actuarial differences	Other reserves	Net result for the period	Group's net equity	Net result and net equity of others Total net equity
Balance as of 1st January 2016	234,412	46,882	(17,522)	(99)	108,578	43,014	415,264	4,873	420,137
Result for the period						22,651	22,651	1,487	24,138
Other operations					167		167	21	187
Total result of overall income statement				0	167	22,651	22,818	1,507	24,325
Allocation of 2015 result					43,014	(43,014)	0		0
Balance as of 31st March 2016	234,412	46,882	(17,522)	(99)	151,758	22,651	438,081	6,380	444,461
(thousands of Euro)	Share capital	Legal reserve	Own shares	Reserves IAS 19 actuarial differences	Other reserves	Net result for the period	Group's net equity	Net result and net equity of others Total net equity
Balance as of 1st January 2015	234,412	46,882	(17,660)	(286)	106,426	35,583	405,357	4,309	409,666
Result for the period						21,394	21,394	1,438	22,832
Total result of overall income statement				0		21,394	21,394	1,438	22,832
Allocation of 2014 result					35,583	(35,583)	0		0
Balance as of 31st March 2015	234,412	46,882	(17,660)	(286)	142,009	21,394	426,749	5,748	432,498

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Consolidated financial statements

	First quarter 2016	First quarter 2015
(thousands of Euro) Net income of the Group	22,651	21,394
Cash flows generated (used) by operating activities
Adjustments to reconcile net income to net cash
Third-parties operating result	1,487	1,438
Amortization	5,084	4,830
Bad debt provisions	616	835
Variations in severance indemnity	43	29
Current assets / liabilities on financial instruments	(62)	0
Net variation of other funds	0	(94)
Evaluation of subsidiaries with the net equity method	(3,586)	(3,452)
Impairment losses / (gains) on shareholdings	(396)	0
Interests paid	(297)	(543)
Interest expense for the year	237	454
Taxes for the year	7,955	9,190
Variations in assets and liabilities
Inventories	65	(89)
Accounts payable	(42,495)	(82,220)
Other current assets	16,031	32,977
Trade payables	(13,603)	(8,719)
Other current liabilities	52,053	43,044
Other non-current assets	546	8
Other non-current liabilities	729	502
Total adjustments and variations	24,408	(1,807)
Cash flows generated (used) by operating activities	47,059	19,587
Cash flows generated (used) by investments
Investments in intangible assets	(3,606)	(3,092)
Investments in tangible assets	(507)	(86)
Cash flows generated/(used) by investments	(4,113)	(3,178)
Cash flows generated (used) by financial activities
Net changes in debts due to other financers	(2,460)	(16)
Net changes in short-term bank borrowings	(31,202)	(25,552)
Net variation in current financial assets and liabilities	2,678	5,316
Interest expense	60	88
Ignitions loans and mortgages	16,000	50,500
Redemptions loans and mortgages	(28,500)	(80,000)
Cash flows generated (used) by financial activities	(43,424)	(49,664)
Variations in cash	(478)	(33,255)
Cash and cash equivalents at the beginning of the period	28,301	100,882
Cash and cash equivalents at the end of the period	27,823	67,627

________________________________________________________________________________________________

In accordance with CONSOB resolution no. 15519 dated 27th July 2006, the effects of the transactions with related parties are highlighted in the table in paragraph "Transactions with related parties" of this financial report.

EXPLANATORY NOTES

Company information

Ascopiave S.p.A. (hereinafter "Ascopiave", the "Company" or the "Parent Company" and, jointly with its subsidiaries, the "Group" or the "Ascopiave Group") is a legal entity under Italian law.

________________________________________________________________________________________________

As of 31st March 2016, 61.56% of the Company's share capital, amounting to Euro 234,411,575 was held by Asco Holding S.p.A.; the remainder was distributed among other private shareholders. Ascopiave S.p.A. is listed since December 2006 on the Mercato Telematico Azionario – STAR Segment – organised and managed by Borsa Italiana S.p.A..

The registered office of the Company is in Pieve di Soligo (TV), via Verizzo, 1030, Italy.

The publication of the Financial report as of 31st March 2016 of the Ascopiave Group was authorised by resolution of the Board of Directors on 12th May 2016.

General drawing-up criteria and accounting principles adopted

The Group Financial Statements as of 31st March 2016 and of the periods considered as a comparison, have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) adopted by the European Commission and in force as of the date of drawing-up of this report.

The accounting standards used to draw up this interim report are the same as those used to prepare the consolidated financial statements of the Ascopiave Group as of 31 st December 2015 and were applied consistently for all the periods considered.

The results of the interim report are not subject to accounting audit.

Use of estimates

The drawing-up of the interim report for the first quarter of 2016 requires the management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, as well as the information disclosure of contingent assets and liabilities as of the date of the report.

If, in the future, such estimates and assumptions, which are based on the management's best assessment, differ from the actual circumstances, they shall be modified so as to be appropriate in the period in which the circumstances arise. For a detailed description of the most significant evaluation processes of the Group, please refer to paragraph "Use of Estimates" in the Consolidated Financial Statements as of 31st December 2015.

Moreover, some evaluation procedures, in particular the most complex ones, such as the determination of any impairment of non-current assets, are usually fully carried out only while drawing-up the annual financial statements, when all the necessary information is available, except for cases in which there are impairment indicators that require an immediate evaluation of potential losses.

Income taxes are recognised on the basis of the best assessment of the weighted average tax rate expected for the entire financial year by each company included in the consolidation area.

Accounting standards, amendments and interpretations not yet applicable and not adopted ahead of time by the Group

________________________________________________________________________________________________

The Group has not adopted ahead of time any other standard, interpretation or improvement issued but not yet effective.

Consolidation area and principles

The consolidated financial statements include the financial statements of all the subsidiaries. The Group controls an entity (including the structured entities) when the Group is exposed, or is entitled, to the variability of results from such entities and has the possibility of influencing these outcomes through the exercise of power over the entity. The financial statements of the subsidiaries are included in the Consolidated financial statements commencing the date on which control is taken until the date such control ceases. The costs incurred in the acquisition process are expensed in the year they are incurred.

The assets and liabilities, the charges and income of companies consolidated with the line-by-line method are fully included in the consolidated financial statements; the book value of investments is eliminated against the corresponding share of equity of the investee companies. Receivables and payables, as well as the costs and revenues arising from transactions between companies included in the consolidation area are entirely eliminated; the capital gains and losses arising from transfers of assets between consolidated companies, the gains and losses deriving from transactions between consolidated companies related to the sale of assets that remain as inventories of the purchasing company, the write-downs and write-backs of investments in consolidated companies, as well as intercompany dividends are also eliminated.

At the date of acquisition of control, the net equity of the investee companies is determined by attributing to the individual assets and liabilities their current value. Any positive difference between the acquisition cost and the fair value of the net assets acquired is recognised as "Goodwill"; if negative, it is recognised in the income statement.

The equity and profit shares attributable to minority interests are recorded in specific items of the shareholders' equity and income statement. In the case of acquisition of partial control, the equity share of minority interests is determined on the basis of the share of the current values assigned to assets and liabilities at the date of acquisition of control, excluding any goodwill attributable to them (so-called partial goodwill method); in relation to this, the minority interests are measured at their total fair value, also including the goodwill (negative goodwill) attributable to them. The choice of the methods for determining the goodwill (negative goodwill) is made based on each individual business combination operation.

In the case of shares acquired subsequent to the acquisition of control (purchase of minority interests), any difference between the acquisition cost and the corresponding portion of equity acquired is recognised in the equity; similarly, the effects arising from the sale of minority interests without loss of control are recognised in equity.

If the acquisition value of the shares is higher than the net equity pro-quota value of the investees, the positive difference is attributed, where possible, to the net assets acquired based on their fair value while the remainder is recorded in an item of assets, "Goodwill".

The value of goodwill is not amortised but is subject to, at least on an annual basis, an impairment test when facts or changes in the circumstances indicate that the carrying value cannot be realised. Goodwill is booked at cost, net of impairment losses. If the carrying value of the investments is lower than the net equity pro-quota value of the investees, the negative difference is recognised in the income statement. The acquisition costs are booked in the income statement.

Associated companies are those over which a significant influence is exercised, which is presumed to exist when the shareholding is between 20% and 50% of the voting rights. Investments in associates are initially recorded at cost and subsequently accounted for using the equity method. The carrying value of these investments is in line with the Shareholders' equity and includes the recording of the higher values attributed to assets and liabilities and any goodwill identified upon acquisition. The unrealised gains and losses generated on transactions between the Parent Company/Subsidiaries and the investee valued with the equity method are eliminated based on the value of the stake held by the Group in the investee; the unrealised losses are eliminated, except when they represent an impairment.

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The interim financial statements of subsidiaries and jointly controlled Companies used for the purpose of preparing the Interim Consolidated Financial Statements of the first three months of 2016 are those approved by the respective Boards of Directors. The data of the Consolidated companies are adjusted, where necessary, to harmonise them with the accounting standards used by the Parent company, which are in accordance with the IFRSs adopted by the European Union.

The companies included in the consolidation area as of 31st March 2016 and consolidated through the line-by-line, proportional method or equity method are the following:

Company name	Registered offices	Paid-up capital	Group interest	Direct controlling interest	Indirect controlling interest
Parent company
Ascopiave S.p.A.	Pieve di Soligo (TV)	234,411,575
100% consolidated companies
Ascotrade S.p.A.	Pieve di Soligo (TV)	1.000.000	89.00%	89.00%	0%
AP RETI GAS S.p.A.	Pieve di Soligo (TV)	200.000	100.00%	100.00%	0%
Etra Energia S.r.l.	Cittadella (PD)	100.000	51.00%	51.00%	0%
ASM DG S.r.l.	Rovigo (RO)	7.000.000	100.00%	100.00%	0%
Edigas Esercizio Distribuzione Gas S.p.A.	Cernusco sul Naviglio (MI)	1.000.000	100.00%	100.00%	0%
Amgas Blu S.r.l.	Foggia (FG)	10.000	80.00%	80.00%	0%
Blue Meta S.p.A.	Bergamo (BG)	606.123	100.00%	100.00%	0%
Pasubio Servizi S.r.l.	Schio (VI)	250.000	100.00%	100.00%	0%
Veritas Energia S.p.A.	Venezia	1.000.000	100.00%	100.00%	0%
Companies under joint control proportionally consolidated
ASM Set S.r.l.	(1) Rovigo (RO)	200.000	49.00%	49.00%	0%
Estenergy S.p.A.	(2) Trieste (TS)	1.718.096	48.999%	48.999%	0%
Unigas Distribuzione S.r.l.	(3) Nembro (BG)	3.700.000	48.86%	48.86%	0%
	Subsidiary companies consolidated with net equity method
Sinergie Italiane Sr.l. in liquidazione	Milano (MI)	1,000,000	30.94%	30.94%	0%

(1) Joint control with ASM Rovigo S.p.A.;

(2) Joint control with AcegasApsAmga S.p.A.;

(3) Joint control with Anita S.p.A..

As compared to the financial statements closed at 31 st December 2015, on 18th March 2016 the company AP Reti Gas S.p.A. was established with a share capital of Euro 200 thousand, fully paid-in, 100% controlled by Ascopiave S.p.A..

Synthesis data of fully consolidated companies and jointly controlled companies consolidated through the equity method

Ascopiave Group

Description	Revenues from sales and service supply	Net result	Net equity	Net financial position (liquid assets)	Reference accounting principles
Amgas Blu S.r.l.	7,471	995	3,006	(4,431)	Ita Gaap
AP RETI GAS S.p.A.		(1)	199	(200)	IFRS
Ascopiave S.p.A.	20,115	2,060	395,014	108,145	IFRS
Ascotrade S.p.A.	113,351	10,661	41,761	(17,322)	IFRS
Blue Meta S.p.A.	27,255	3,253	12,456	(6,161)	Ita Gaap
Edigas Esercizio Distribuzione Gas S.p.A.	1,252	144	9,287	(923)	Ita Gaap
Estenergy S.p.A.	53,918	5,679	27,750	1,154	IFRS
Etra Energia S.r.l.	2,701	264	686	(725)	Ita Gaap
Pasubio Servizi S.r.l.	15,758	2,081	7,454	(6,031)	Ita Gaap
ASM DG S.r.l.	1,081	258	12,983	(1,336)	Ita Gaap
ASM Set S.r.l.	11,101	1,353	3,420	(2,561)	Ita Gaap
Unigas Distribuzione S.r.l.	3,062	397	40,242	2,151	Ita Gaap
Veritas Energia S.p.A.	25,999	1,257	4,754	(381)	Ita Gaap

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The financial statements of the subsidiaries prepared in accordance with the national accounting standards are homogenised during consolidation.

COMMENTS ON THE MAIN CONSOLIDATED BALANCE SHEET ITEMS

Non-current assets

1. Goodwill

Goodwill, equal to Euro 80,758 thousand as of 31st March 2016, remains unchanged as compared to 31st December 2015. This amount refers in part to the surplus value created by the delivery of the gas distribution networks by partner municipalities in the period between 1996 and 1999, and in part to the surplus value paid during the acquisition of some company branches related to the distribution and sale of natural gas.

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In accordance with International Accounting Standard 36, goodwill is not subject to depreciation, but its impairment is verified at least annually.

In order to determine the recoverable amount, the goodwill is allocated to the Cash Generating Unit composed of the natural gas distribution activity (gas distribution CGU) and to the Cash Generating Unit consisting in the natural gas sale activity (gas sale CGU). The cash-generating units to which goodwill was allocated are the following:

(Thousands of Euro)	31.12.2015	Increase	Decrease	31.03.2016
Distribution of natural gas	24,396			24,396
Sales of natural gas	56,362			56,362
Total goodwill	80,758			80,758

As of 31st March 2016, considering the outcome of the impairment tests carried out while preparing the balance sheet as of 31st December 2015, the evolution of the external indicators and of the internal values previously used to estimate the value recoverable from the cash-generating units and that there are no new, significant impairment indicators to take into account, the administrators did not judge it necessary to carry out another impairment test on the book value of the goodwill reported above.

2. Other intangible fixed assets

The changes in the historical cost and accumulated amortisation of intangible assets at the end of the each period considered are shown in the following table:

	31.03.2016			31.12.2015
	Historic	Accumulated	Net value	Historic	Accumulated	Net value
(Thousands of Euro)	cost	depreciation		cost	depreciation
Industrial patent and intellectual property rights	4,886	(4,369)	517	4,886	(4,321)	565
Concessions, licences, trademarks and similar rights	9,933	(4,281)	5,652	9,933	(4,096)	5,837
Other intangible assets	25,631	(15,460)	10,171	25,631	(14,838)	10,793
Tangible assets under IFRIC 12 concession	520,580	(233,865)	286,715	520,579	(230,243)	290,336
Intangible assets in progress under IFRIC 12 concession	12,747	0	12,747	9,128	0	9,128
Other intangible assets	573,777	(257,975)	315,802	570,157	(253,498)	316,659

The changes in the inventory allowance for intangible assets in the year under examination are shown in the following table:

31.12.2015						31.03.2016
(Thousands of Euro)	Net value	Change for the period	Decrease	Amortizations during the period	Depreciations	Net value
Industrial patent and intellectual property rights	565	(0)		0 48		0 517
Concessions, licences, trademarks and similar rights	5,837	0		0 185		0 5,652
Other intangible assets	10,793	0		0 622		0 10,171
Tangible assets under IFRIC 12 concession	290,336	2		0 3,623		0 286,715
Intangible assets in progress under IFRIC 12 concession	9,128	3,619		0 0		0 12,747
Other intangible assets	316,659	3,621		0 4,478		0 315,802

The investments made during the financial year amount to Euro 3,621 thousand and refer to costs incurred for the construction of the infrastructures for natural gas distribution.

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Industrial patents and intellectual property rights

During the period considered, the item "Industrial patents and intellectual property rights" did not register increases and the variation (equal to Euro 48 thousand) as compared to the previous year is explained by the amortisations of the period.

Concessions, licences, trade-marks and similar rights

This item includes costs paid to awarding entities (Municipalities) and/or outgoing operators after the award and/or the renewal of the relevant tenders for the assignment of the natural gas distribution service, rather than the costs incurred for the acquisition of licenses. During the year, the item did not register increases and the variation is explained by amortisation. The assignments obtained, following the implementation of Legislative Decree no. 164/00 (Letta Decree), are amortised with a useful life of 12 years in compliance with the period provided for by the decree.

Other intangible fixed asset

This item includes the fair value of customer lists that result from the acquisition of companies operating in the sale of natural gas and electricity that occurred in previous years. The analysis of customers switching performed at the end of the first quarter of 2016 has not highlighted any switch-out percentages above the expected depreciation percentage, and therefore its useful life (10 years) has not required any changes or impairments.

Leased plants and machinery

The item reports the costs incurred into for the construction of facilities and distribution network of natural gas, the related connections as well as for the installation of measurement and reduction groups. At the end of the first quarter of the financial year, the item registered a decrease of Euro 3,621 thousand due to the amortisation of the period.

The infrastructures located in Municipalities in which the invitation to tender for the distribution of natural gas has not been launched, are depreciated by applying the lower amount between the technical life of plants and the useful life indicated by the AEEGSI in tariff regulations. The technical life of plants has been assessed by an independent external expert who has determined the technical obsolescence of the infrastructures.

Intangible assets in progress under concession

The item includes the costs incurred into for the building of the natural gas distribution plants and systems constructed partially on a time and materials basis and not completed at the end of the period considered. The item involved investments amounting to Euro 3,619 thousand.

3. Tangible assets

The changes in the historical cost and accumulated amortisation of tangible assets at the end of the period under examination are shown in the following table:

Ascopiave Group

	31.03.2016				31.12.2015
	Historic	Accumulated		Historic	Accumulated
(Thousands of Euro)	cost	depreciation	Net value	cost	depreciation	Net value
Lands and buildings	36,575	(8,902)	27,673	36,575	(8,629)	27,945
Plant and machinery	4,576	(1,935)	2,641	4,576	(1,879)	2,697
Industrial and commercial equipment	3,174	(2,581)	593	3,172	(2,539)	633
Other tangible assets	15,594	(12,479)	3,116	15,354	(12,232)	3,122
Tangible assets in progress and advance
payments	851	0	851	590	0	590
Other tangible assets	60,770	(25,897)	34,873	60,266	(25,278)	34,987

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The changes in the inventory allowance for tangible assets in the year under examination are shown in the following table:

31.12.2015						31.03.2016
(Thousands of Euro)	Net value	Change for the period	Decrease	Amortizations during the period	Depreciations	Net value
Lands and buildings	27,945	0		272		27,673
Plant and machinery	2,697	0		57		2,641
Industrial and commercial equipment	633	2		42		593
Other tangible assets	3,122	241		247		3,116
Tangible assets in progress and advance
payments	590	261		0		851
Other tangible assets	34,987	504		0 618		0 34,873

Land and buildings

This item is mainly made up of the buildings owned in relation to company offices, peripheral offices and warehouses. At the end of the period, the item did not register increases and the variation is explained by the amortisation of the period.

Plants and machinery

The item "Plants and machinery" decreases from Euro 2,697 thousand in the previous year, to Euro 2,641 thousand on 31st March 2016. The variation, equal to Euro 57 thousand, is explained by the amortisation of the period.

Industrial and commercial equipment

The item "Industrial and commercial equipment" in the period considered registered investments equal to Euro 2 thousand. It includes costs incurred for the purchase of equipment for the maintenance service of the distribution plants and for metering activity.

Other assets

The investments made during the current financial year, increased the item "Other assets" by Euro 241 thousand, and they mainly relate to the costs incurred for the purchase of corporate vehicles for Euro 219 thousand and furniture and furnishings for Euro 22 thousand.

Tangible assets in progress and advance payments

The item essentially includes the costs concerning the construction of co-generation plants built partially on a time and materials basis as well as the costs incurred for extraordinary maintenance of corporate offices. During the period considered the item registered investments equal to Euro 261 thousand.

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4. Shareholdings

The following table shows the changes in the shareholdings in joint companies and in other companies at the end of each period considered:

________________________________________________________________________________________________

	31.12.2015			31.03.2016
(Thousands of Euro)	Net value	Increase	Decrease	Net value
Shareholdings in jointly controlled companies	68,078	6,759	3,318	71,518
Shareholdings in other companies	1			1
Shareholdings	68,078	6,759	3,318	71,519

Shareholdings in joint companies

Shareholdings in joint companies increase from Euro 68,078 thousand to Euro 71,519 thousand, marking an increase of Euro 3,441 thousand. In particular, the increase is connected to the results achieved in the first quarter of 2016 by the jointly controlled companies.

The evaluation of the shareholdings in jointly controlled companies with the net equity method and their profit and loss statement and balance sheet figures are shown in the section "Synthesis data as of 31st March 2016 of the jointly controlled companies consolidated through the net equity method" of the Explanatory Notes.

Shareholdings in affiliate companies

Sinergie Italiane S.r.l. in liquidation

The Group has shareholdings in the affiliate Sinergie Italiane S.r.l., company in liquidation, which meets part of the needs for natural gas amounting to 30.94%. The associate closes its financial year on 30th September.

The scope of activity of the associate company during the financial year 2015-2016 only included the import of Russian gas and its transfer to the sales companies in which shareholders hold a stake as well as the management of agreements, transactions and disputes concerning the regulation of contractual relations, finalised before to the liquidation.

It should be noted that during the month of August 2013, the associate completed the renegotiation of natural gas purchase prices envisaged by the "Take or pay" agreements with the supplier Gazprom Export LLC; the economic benefit resulting from the renegotiation was therefore extended to the two-year periods 2013-2014 and 2014-2015.

In September 2015, the affiliate signed the second renegotiation of the long-term agreement with the same supplier, mainly focussed on the renegotiation of the raw material purchase price. At the same time, it was possible to achieve a significant reduction in the minimum contractual amounts. The economic effects of this renegotiation will also affect the three thermal years 2015/2016 - 2017/2018.

Based on the results of the financial statements for the year 2014-2015, as approved by the Shareholders' meeting on 18^h December 2015 and on preliminary operating data of financial year 2015-2016 restated in accordance with international accounting principles, considering the associate on a going concern basis, the accumulated capital deficit amounts to Euro 16,829 thousand, of which Euro 5,207 thousand attributable to the Ascopiave Group. Given that the capital deficit of the affiliate company as of 31st December 2015 amounted to Euro 17,300 thousand, of which Euro 5,353 thousand attributable to the Ascopiave Group, the Directors have adjusted the related provision for risks and charges allocated against the capital deficit of the affiliate company for Euro 146 thousand with a positive impact on the profit and loss statement (Euro 157 thousand as of 31st March 2015).

The essential data of the shareholdings in the subsidiary as of 31st March 2016, 31st December 2015 and 31st March 2016 are reported below:

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(Values referred to pro-rata partecipation

in Million of Euro )
	31/03/2016	31/12/2015	31/03/2015
Non-current assets	2.79	2.84	3.40
Current assets	8.33	9.32	13.27
Net equity	(5.01)	(5.13)	(6.50)
Non-current liabilities	0.00	0.00	0.00
Current liabilities	15.10	16.28	22.21
Revenues	28.79	15.89	29.66
Costs	(27.96)	(15.39)	(28.18)
Gross operative margin	0.83	0.50	1.48
Amortization and depreciation	(0.40)	(0.20)	(0.40)
Operating result	0.43	0.30	1.08
Net result	0.41	0.30	0.64
NFP	3.01	2.60	4.16

5. Other non-current assets

(Thousands of Euro)	31.03.2016	31.12.2015
Security deposits	10,760	11,304
Other receivables	4,060	4,062
Other non-current assets	14,820	15,366

Non-current assets are mostly made up of security deposits that the companies selling natural gas have issued for the monthly payments due for the import of gas from Russia and deposits paid to Gestore Mercati Energetici for the purchase of energy efficiency certificates. Other non-current assets decrease from Euro 15,366 thousand to Euro 14,820 thousand, marking a decrease of Euro 546 thousand.

The other items in "Other receivables" are made up of:

• Receivables from the Municipality of Creazzo, for a value of Euro 1,678 thousand, which are written off for Euro 464 thousand as compared to 31st December 2006. The delivery of said infrastructures occurred following the date of expiry of the concession, on 31st December 2004. The value of the receivables from the municipality corresponds to what the municipality of Creazzo has been asked to retrocede, as per the "Letta" legislative decree, article 15, paragraph 5, as indemnification of the industrial value of the network, in line with the estimations outlined in a suitable appraisal. A litigation is going on with the municipality, in order to define the value of the compensation of the distribution plants delivered to new distributors, whose evolution can be found in the paragraph "Litigations" of these financial statements.
• Receivables from the Municipality of Santorso, for Euro 748 thousand. The value corresponds to the net book value of the distribution plants delivered in August 2007 to the same municipality; the delivery of said infrastructures occurred following the date of expiry of the concession, on 31st December 2006. The value of the receivables from the municipality corresponds to what the municipality of Santorso has been asked to

retrocede as per the "Letta" legislative decree, article 15, paragraph 5, as indemnification of the industrial value of the network, in line with the estimations outlined in a suitable appraisal.

• Receivables from the municipality of Costabissara, for Euro 1,537 thousand. This amount corresponds to the net book value of the distribution systems delivered on 1st October 2011.

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As of 31st March 2016, there are on-going litigations with the municipalities mentioned above in order to define the value of compensation of the delivered distribution systems. The Group, also following the opinion of its legal advisors, believes that the result of the litigation and arbitration procedures is uncertain.

6. Advance tax receivables

The following table highlights the balance of advance tax receivables at the end of each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Advance tax receivables	10,848	11,333
Advance tax receivables	10,848	11,333

Advance taxes decrease from Euro 11,333 thousand to Euro 10,848 thousand, marking a decrease of Euro 485 thousand.

In calculating the taxes, reference was made to the IRES rate and, where applicable, to the IRAP rate in force, in relation to the tax period which includes the date of 31st March 2016 and at the time when it is estimated that any temporary differences will be carried forward.

Current assets

7. Inventories

The following table shows how the items are broken down for each period considered:

	31.03.2016			31.12.2015
(Thousands of Euro)	Gross value	Bad debt provision	Net value	Gross value	Bad debt provision	Net value
Gas stockage	1,414	(574)	840	1,980	(562)	1,418
Fuels and warehouse materials	2,704	(33)	2,671	2,192	(33)	2,159
Fuels and warehouse materials	4,119	(607)	3,511	4,172	(595)	3,577

As of 31st March 2016, inventories are equal to Euro 3,511 thousand and show an overall decrease equal to Euro 66 thousand as compared to 31st December 2015. The decrease is mainly explained by the decrement in the amount of natural gas stored (Euro -578 thousand), which is almost entirely offset by the increase in goods in stock (Euro +513 thousand).

The decrease in natural gas inventories is determined by the combined effect of lower costs incurred for the purchase of the raw material, explained by the performance of the price basket to which the raw material is adjusted, as well as by the decrease in the cubic meters of natural gas stored at the end of the reporting period, from 8.12 million as of 31st

December 2015, to 5.77 million cubic meters as of 31 st March 2016. The variation in the raw material stored is attributable to the seasonal nature of the sales of natural gas, which concentrates in the first quarter of each financial year the highest consumption of the end customers.

________________________________________________________________________________________________

The warehouse materials are used for maintenance works or for the construction of distribution plants. In the latter case materials are reclassified as Tangible Fixed Assets once installation is complete.

Inventories are entered net of the provision for loss in value of stock, equal to Euro 607 thousand, in order to adapt their value to the opportunities for their clearance or use. The value of gas inventories is calculated based on the weighted average purchase price of the raw material, whereas the provision for gas inventory depreciation is evaluated on the basis of the market price recorded on the last day of the reporting period (31st March 2016, that is 13.750 €/MWh, 31st December 2015, that is 16.500 €/MWh; source PB-GAS).

8. Trade receivables

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Receivables from customers	131,044	82,413
Receivables for invoices to be issued	92,145	101,660
Bad debt provisions	(9,289)	(12,052)
Trade receivables	213,901	172,022

Trade receivables increased from Euro 172,022 thousand to Euro 213,901 thousand, marking an increase of Euro 41,879 thousand (as of 31st March 2015: Euro 229,189 thousand).

Receivables from customers are owed from national debtors and are expressed net of the billing down payments and are payable within the following 12 months.

The increase is mainly explained by the timings of billing and collection in the sale of natural gas and electricity and the seasonal nature of the business cycle which, at this time of year, significantly affects the balances of receivables from final customers.

The lower provisions, equal to Euro 2,763 thousand, are mainly explained by the important use due to the intensive activity of cancellation of older receivables for which all the recovery activities have been completed unsuccessfully, and by the lower provision for doubtful accounts made in the first quarter of 2016 due to the good capacity of the existing provisions and the results of the debt collection process by external agencies and the network of appointed lawyers.

In particular, Euro 3,011 thousand of the total uses of the provision for bad debts, which amounts to Euro 3,378 thousand, are attributable to the company Veritas Energia S.p.A.. Commencing 2014, the year in which 100% of capital was acquired, and until 10th February 2016, an intense credit management activity for the receivables outstanding at the time of purchase was started for Veritas Energia S.p.A.. Subsequent to these operations, the oldest outstanding receivables have been written off, after performing all the activities required by the Group's debt collection policy. The outstanding receivables as of 10th February 2014 equalled Euro 28,085 thousand; of this total amount, as of 31st February 2016, Euro 20,119 thousand were collected and Euro 7,622 thousand were written off, of which Euro 2,579 during the first quarter of 2016 alone.

______________________________________________________________________________________________

The changes in the provision for doubtful accounts are shown in the following table:

(Thousands of Euro)	31.03.2016	31.12.2015
Bad debt provisions	12,052	18,566
Provisions	616	4,004
Use	(3,378)	(10,518)
Final bad debt provision	9,289	12,052

The following table highlights the composition of accounts receivables for invoices issued based on ageing, highlighting the capacity of the allowance for doubtful accounts as compared to receivables with higher ageing:

________________________________________________________________________________________________

(Thousands of Euro)	31st March 2016	31st December 2015
Gross trade receivables for invoices issued	131,044	82,413
- allowance for doubtful accounts	(9,289)	(12,052)
Net trade receivables for invoices issued	121,755	70,362
Aging of trade receivables for invoices issued:
- to expire	104,338	62,031
- expired within 6 months	16,466	6,892
- overdue by 6 to 12 months	2,762	3,504
- expired more than 12 months	7,478	9,986

9. Other current assets

The following table shows the composition of the other current assets at the end of the period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Tax consolidation receivables	1,740	1,570
Annual pre-paid expenses	1,093	736
Advance payments to suppliers	8,253	7,587
annual accrued income		136
Receivables due from Conguaglio Settore Elettrico	16,641	29,217
VAT Receivables	1,008	3,309
UTF and Provincial/Regional Additional Tax receivables	1,140	3,515
Other receivables	611	449
Other current assets	30,487	46,518

Other current assets decreased from Euro 46,518 thousand to Euro 30,487 thousand, marking a decrease of Euro 16,031 thousand.

The variation is mainly explained by the decrease in receivables from Cassa Conguaglio Settore Elettrico for the tariff and equalisation components for Euro 12,576 thousand, from the Agenzia delle Dogane (Customs Office) for Euro 2,375 thousand, and the decrease in VAT receivables for Euro 2,301 thousand. These decreases are partially offset by the increase in payments on account, prepaid expenses and receivables due to tax consolidation.

The variation of UTF (Customs Office) and Regional/provincial surtax receivables is related to the modality of payment of taxes on consumption based on the monthly billings to end users as opposed to monthly advances envisaged by the tax returns in the first months of the year and based on the consumption of previous year.

The IRES receivables for the Italian National Tax Consolidation Convention refer to receivables from the parent company Asco Holding S.p.A. with reference to the companies of the Group which have adopted this option.

10. Current financial assets

The following table shows the composition of the other current assets at the end of the period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Other financial current assets	659	3,487
Current financial assets	659	3,487

The current financial assets decrease from Euro 3,487 thousand to Euro 659 thousand, with a decrease of Euro 2,827 thousand.

________________________________________________________________________________________________

The decrease is mainly attributable to the settlement of the repurchase agreements, expired on 10th February 2016, for Euro 2,838 thousand, purchased with the liquidity paid in February 2014 by Veritas S.p.A. as a security deposit envisaged as a guarantee on trade receivables of Veritas Energia S.p.A. when Ascopiave S.p.A. purchased 49% of Veritas Energia S.p.A..

A marginal note is the inclusion in other current financial assets of the receivables due to Ascopiave S.p.A. from the Municipality of San Vito Leguzzano, expiring on 30th June 2016.

11. Tax receivables

The following table shows the composition of tax receivables at the end of each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Receivables related to IRAP	368	368
Receivables related to IRES	648	647
Other tax receivables	352	352
Tax receivables	1,368	1,368

Tax receivables are unchanged since 31st December 2015. The item includes the residual credit, minus the taxes for the first quarter of 2016, of the IRAP advances paid and the IRES advances for the companies that do not adhere to the Group tax consolidation system.

12. Cash and cash equivalents

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Bank and post office deposits	27,809	28,286
Cash and cash equivalents on hand	14	15
Cash and cash equivalents	27,823	28,301

The cash and cash equivalents decreased from Euro 28,301 thousand to Euro 27,823 thousand, with a decrease of Euro 478 thousand and they mainly refer to the bank accounting balance and to the company funds.

For a better understanding of the variations of cash flows in the first quarter of 2016, please refer to the consolidated financial statement.

________________________________________________________________________________________________

Net financial position

At the end of the periods considered, the net financial position of the Group is the following:

(Thousands of Euro)	31.03.2016	31.12.2015
Cash and cash equivalents	27,823	28,301
Current financial assets	659	3,487
Current financial liabilities	(653)	(3,641)
Payables due to banks and financing institutions	(55,950)	(97,866)
	(68)	(67)
Net short-term financial position	(28,189)	(69,786)
Medium- and long-term bank loans	(42,042)	(43,829)
Non-current financial liabilities	(404)	(422)
Net medium and long-term financial position	(42,447)	(44,250)
Net financial position	(70,635)	(114,037)

For comments on the main dynamics that caused changes in the net financial position, please refer to the analysis of the Group's financial data reported under the paragraph "Comments on the economic and financial results of the first quarter of financial year 2016" and under the paragraph "Medium- and long-term loans" of these Interim financial statements.

Consolidated shareholders' equity

13. Net shareholders' equity

Ascopiave S.p.A.'s share capital as of 31st March 2016 is made up of 234,411,575 ordinary shares, fully subscribed and paid, with a par value of Euro 1 each.

______________________________________________________________________________________________

The shareholders' equity at the end of the periods considered is analysed in the following table:

Ascopiave Group

(Thousands of Euro)	31.03.2016	31.12.2015
Share capital	234,412	234,412
Legal reserve	46,882	46,882
Own shares	(17,521)	(17,521)
Reserves	151,658	108,478
Group's Net Result	22,651	43,014
Net equity of the Group	438,081	415,264
Net equity of Others	4,893	2,524
Third parties Net Result	1,487	2,349
Net equity of Others	6,380	4,873
Total Net equity	444,461	420,137

________________________________________________________________________________________________

In the first quarter of 2016, the variations in the consolidated net equity, excluding the result achieved in the period, were due to a positive variation of Euro 187 thousand related to a Cash Flow Hedge reserve against the valuation at fair value of derivatives as of 31st March 2016.

The hedging effects accrued during the year and those transferred to the profit and loss account in order to adjust the underlying supply costs with reference to all derivatives designated as hedge accounting during the year are:

(Thousands of Euro)
Opening balance	194
Effectiveness gained during the period	0
Effectively released in the income statement during the period	-187
Closing balance	7

The value of the cash flow hedge reserve as of 31st March 2016 refers to the expected supply flows which will be recognised at cost (and therefore with effects on the income statement) in the third and fourth quarter of 2016 and 2017. Assuming a 10% change in the future quotes of natural gas (i.e. TTF Month Ahead) at 31st March 2016, upward and downward, there would be, respectively, an improvement and a worsening of approximately Euro 33 thousand in the balance of the Equity cash flow hedge reserve; instead, there would be no impact on the Profit and Loss statement due to the total effectiveness of the hedging relationships analysed.

Net equity of minority interests

This item includes the net assets and the result not attributable to the Group, and refers to third party shares of the subsidiaries Ascotrade S.p.A., Etra Energia S.r.l., Amgas Blu S.r.l..

______________________________________________________________________________________________

Non-current liabilities

14. Reserves for risks and charges

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Altri fondi rischi ed oneri	7,214	7,360
Fondi rischi ed oneri	7,215	7,360

Reserves for risks and charges decreased from Euro 7,360 thousand to Euro 7,215 thousand, marking a decrease of Euro 145 thousand.

________________________________________________________________________________________________

The variation is mainly explained by the decrease in the provisions for risks related to Sinergie Italiane S.r.l. in liquidation.

The changes in the period under examination are shown in the following table:

(Thousands of Euro)
Reserves for risks and charges as of 1st January 2016	7,360
Provisions for risks hedging losses of associates with the
equity method	(146)
Use of provisions for risks and charges	1
Provisions for risks and chargesas of 31st march 2016	7,215

15. Severance indemnity

Severance indemnity increases from Euro 3,864 thousand as of 1st January 2016 to Euro 3,906 thousand as of 31^sMarch 2016, with an increase equal to Euro 42 thousand.

(Thousands of Euro)
Severance indemnity as of 1st January 2016	3,864
Retirement allowance	(283)
Payments for current services and work	326
Severance indemnity as of 31st march 2016	3,906

16. Medium- and long-term loans

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Loans from Prealpi	721	757
Loans from European Investment Bank	32,750	34,500
Loans from Unicredit S.p.A.	8,571	8,571
Medium- and long-term bank loans	42,042	43,829
Quota corrente finanziamenti medio-lungo termine	9,628	9,628
Finanziamenti a medio-lungo termine	51,671	53,456

Medium and long term loans, mainly represented as of 31st March 2016 by the payables of the Parent Company to the European Investment Bank for Euro 36,250 thousand and Unicredit for Euro 14,286 thousand, decrease from Euro

53,456 thousand to Euro 51,671 thousand, marking a decrease of Euro 1,785 thousand, explained by the payment of the loan instalments during the quarter.

________________________________________________________________________________________________

Concerning the loan issued by the European Investment Bank, paid in two tranches in 2013 equalling Euro 45,000 thousand, its outstanding debt as of 31st March 2016 is equal to Euro 36,250 thousand, with Euro 3,500 thousand classified in due to banks and short-term loans, and it envisages the fulfilment of some covenants applied to consolidated data prepared in accordance with IFRS, which as of 31st December 2015 were respected.

The medium long-term loan with Unicredit S.p.A. was signed by the Parent Company in 2011, to finance important company aggregation operations. The original amount of the loan was Euro 40,000 thousand. It has an outstanding debt as of 31st March 2016 amounting to Euro 14,286 thousand, with Euro 5,714 thousand classified in due to banks and short-term loans, and envisages the fulfilment of some financial covenants to be checked twice a year on the pro-forma consolidated data based on the sum of the consolidated financial statements and the pro-rata share of the jointly controlled companies. As of 31st December 2015 these parameters were respected.

As a guarantee of the fulfilment of the obligations associated with the loan agreement, the Parent Company has sold to the European Investment Bank a share of future receivables arising from the reimbursement of the value of assets related to gas distribution concessions.

17. Other non-current liabilities

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Security deposits	12,013	12,054
Multi-annual passive prepayments	7,619	6,849
Other non-current liabilities	19,632	18,903

Other non-current liabilities increased from Euro 18,903 thousand to Euro 19,632 thousand, marking an increase of Euro 729 thousand.

Security deposits refer to deposits of gas and electricity users.

Long-term deferred income was recognised against revenues on connections to the gas network and related to the useful life of the gas distribution plants, against revenues on co-generation plants/heat supply and against revenues on contributions for the construction of distribution network. The suspension of revenues is explained by the content of Law no. 9/2014 which envisages the full deduction of contributions from private individuals from the value of technical assets held under concession within the scope of gas distribution.

18. Non-current financial liabilities

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Payables due to leasing companies (over 12 months)	404	422
Non-current financial liabilities	404	422

Non-current financial liabilities decreased from Euro 422 thousand as of 31st December 2015 to Euro 404 thousand, marking a decrease of Euro 17 thousand, and mainly include payables to leasing companies due after 12 months.

19. Deferred tax payables

The following table shows how the item is broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Deferred tax payables	19,242	19,571
Deferred tax payables	19,242	19,571

Payables for deferred taxation decrease from Euro 19,571 thousand to Euro 19,242 thousand, marking a decrease of Euro 328 thousand, mainly due to the dynamics of amortisations in the client lists.

________________________________________________________________________________________________

In calculating the taxes, reference was made to the IRES rate and, where applicable, to the IRAP rate in force, in relation to the tax period which includes the date of 31st March 2016 and at the time when it is estimated that any temporary differences will be carried forward.

Current liabilities

20. Amounts due to banks and current portion of medium- / long-term loans

The following table shows how the item is broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Payables due to banks	46,322	88,238
Current portion of medium-long-term loans	9,628	9,628
Payables due to banks and financing institutions	55,950	97,866

Payables to banks decrease from Euro 97,866 thousand to Euro 55,950 thousand, marking a decrease of Euro 41,916 thousand and include debtor accounting balance to credit institutions and the short-term quota of loans.

21. Trade payables

The following table shows how the item is broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Payables to suppliers	28,341	43,078
Payables to suppliers for invoices not yet received	80,878	79,744
Trade payables	109,220	122,823

Trade payables decrease from Euro 122,823 thousand to Euro 109,220 thousand, a decrease of Euro 13,603 thousand. This variation is mainly explained by the decrease in the purchase cost related to the trend of the price basket to which the raw material is adjusted.

______________________________________________________________________________________________

22. Payables to tax authorities

The following table shows how the item is broken down for each period considered:

Ascopiave Group

(Thousands of Euro)	31.03.2016	31.12.2015
IRAP payables	1,585	176
IRES payables	738	221
Tax payables	2,323	397

Tax payables increase from Euro 397 thousand to Euro 2,323 thousand, marking an increase of Euro 1,926 thousand and include payables accrued at the end of the first quarter of 2016 for IRAP, and the IRES payable related to the companies which do not adhere to Asco Holding S.p.A.'s tax consolidation system.

________________________________________________________________________________________________

23. Other current liabilities

The following table shows how the item is broken down at the end of each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Advance payments from customers	1,950	1,821
Amounts due to parent companies for tax consolidation	10,712	3,020
Amounts due to social security institutions	1,406	1,441
Amounts due to employees	5,334	4,419
VAT payables	30,124	2,643
Payables to revenue office for withholding tax	651	951
Annual passive prepayments	809	1,102
Annual passive accruals	2,367	1,059
UTF and Provincial/Regional Additional Tax payables	25,160	2,881
Other payables	22,551	23,986
Other current liabilities	101,062	43,324

Other current liabilities increased from Euro 43,324 thousand to Euro 101,062 thousand, marking an increase of Euro 57,738 thousand.

Advances from clients

Advances from clients represent the amounts paid by the customers as a contribution for works of allotments and connection and realisation of thermal plants in progress as of the end of the financial period as of 31 st March 2016.

Tax consolidation payables

This heading includes the accrued payables to parent company Asco Holding S.p.A., as part of the National Consolidation regime contracts signed by the Group companies with Asco Holding S.p.A.. The balance corresponds to the IRES payables accrued for taxation up to 31st March 2016 and has increased by Euro 7,692 thousand as compared to 31st December 2015.

Amounts due to employees

The amounts due to employees include holidays not taken, deferred remuneration and bonuses earned as of 31st March 2016 but not paid out on that date.

VAT payables

VAT payables increased by Euro 27,480 thousand as compared to 31st December 2015. The increase in VAT payables is explained by the quarterly compensation of the tax, granted to the subsidiaries selling natural gas, in that they fall within the category of the subjects billing a high number of end customers.

________________________________________________________________________________________________

Annual deferred income

The change in the item is mainly related to the reclassification from other payables of deferred income on revenues from co-generation/heat supply.

Annual accrued liabilities

Accrued liabilities refer mainly to State fees and the fees granted to local licensing bodies for the extension of the concession for the distribution of natural gas, awaiting the territorial calls for tenders.

UTF payables and Additional Regional/Provincial Tax

They relate to amounts payable to the technical department of finance and to the payment of excise duty and additional taxes on natural gas. The balance is explained by the different timing of billing gas consumption to users, in contrast with the monthly payments carried out by the sales company with reference to the previous period. As of 31st March 2016, the Group's total amount of payables is Euro 25,160 thousand as compared to Euro 6,098 thousand in the first three months of the previous year.

Other payables

Other payables, mainly consisting of payables to Cassa Conguaglio Settore Elettrico for the tariff components connected to the gas transportation activity, payables for contributions to employees for family allowances and payables for incentive plans, have decreased as compared to 31st December 2015 by Euro 1,435 thousand.

The Group grants additional benefits to some employees in strategic positions within the Group. These benefits are partially based on financial instruments (so-called "long-term incentive plan 2015-2017").

In particular, the plans adopted by the Group include the allocation of rights including acknowledgement in favour of the beneficiaries of an extraordinary payment linked to the reaching of pre-set objectives.

24. Current financial liabilities

The following table shows how the items are broken down for each period considered:

(Thousands of Euro)	31.03.2016	31.12.2015
Financial payables within 12 months	653	3,641
Payables to leasing companies within 12 months	68	67
Current financial liabilities	721	3,708

Current financial liabilities have decreased from Euro 3,708 thousand to Euro 721 thousand, marking a decrease of Euro 2,987 thousand, mainly due to the definition, in February 2016, of the compensation due to Ascopiave S.p.A. by Veritas

S.p.A., agreed upon when Ascopiave S.p.A. purchased 49% of Veritas Energia S.p.A., as a guarantee on trade receivables of the company purchased in February 2014.

________________________________________________________________________________________________

25. Current liabilities from derivative financial instruments

The following table shows how the item is broken down at the end of each period considered

(Thousands of Euro)	31.03.2016	31.12.2015
	190	252
	190	252

Liabilities on derivatives are represented by the fair value of the following commodity derivatives as of 31st March 2016, which will have financial manifestation in 2016 and 2017:

# Ref.	Counterparty	Type of instrument	Underlying Commodity	Trade date	Effective date	Expiry date	Position	Notional	MtM (€)
1 17809118 2 19355207 3 19355256		Intesa Sanpaolo Commodity Swap TTF Month Ahead Intesa Sanpaolo Commodity Swap TTF Month Ahead Intesa Sanpaolo Commodity Swap TTF Month Ahead		21-ott-15 22-mar-16 22-mar-16	1-gen-16 1-set-16 1-set-17	31-mar-16 31-ott-16 31-ott-17	Long/Buy Long/Buy Long/Buy	58.520 MWh 13.080 MWh 13.080 MWh	-183.699 -1.236 -5.310
Totali								84.680	-190.246

COMMENTS ON THE MAIN CONSOLIDATED PROFIT AND LOSS ACCOUNT ITEMS

________________________________________________________________________________________________

Revenues

26. Revenues

The following table shows the composition of the item by type of activity in the fiscal years considered:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Revenues from gas transportation	12,425	11,173
Revenues from gas sale	148,358	187,937
Revenues from electricity sale	15,446	15,753
Revenues from connections	29	140
Revenues from heat supply	37	9
Revenues from distribution services	1,483	878
Revenues from services supplied to Group companies	310	193
Revenues from AEEG contributions	3,052	2,082
Other revenues	1,373	1,330
Revenues	182,512	219,496

At the end of the period considered, the Ascopiave Group's revenues amounted to Euro 182,512 thousand, with a decrease of Euro 36,984 as compared to the same period in the previous year.

The revenues from natural gas sale, equalling Euro 148,358 thousand, record a decrease as compared to the same period of the previous financial year totalling Euro 39,578 thousand. The decrease is mainly explained by a decline in unit sales prices as well as the lower volumes of natural gas sold to the end market (-29.2 million cubic meters); during the first quarter of the year, 349.1 million cubic meters were sold as compared to 378.3 million in the same period in the previous year.

At the end of the first quarter of the year, the revenues deriving from the sale of natural gas to wholesalers or at the virtual trading point (so-called VTP) were booked totalling Euro 11,932 thousand. They mainly relate to the amounts of natural gas imported from Russia. These sales are aimed at the redemption of the procurement risk and at improving the effectiveness of the purchase price of the raw material. The natural gas shipping activity was not performed by the Group during the first quarter of 2015, when those quantities were managed under the framework contract signed for the thermal year 2014-2015 with the Group's reference shipper.

The transportation of natural gas to the distribution network generated revenues for Euro 12,425 thousand, with an increase of Euro 1,252 thousand as compared to the first quarter of the previous year, involving the transport of 339.4 million cubic meters, an increase of 3.3 million as compared to the first quarter of 2015).

The Restriction on total revenues is determined, year after year, on the basis of the number of redelivery points the Company actually served during the reference period, as well as on the reference price, whose values are established and published by the Authority for Electricity and Gas by 15th December of the year before that in which the price becomes effective.

At the end of the period, the revenues from electricity sales amounted to Euro 15,446 thousand, showing a decrease over the previous year of Euro 306 thousand. The KWhs sold in the period considered amount to 84.1 million, a decrease of 7.4 million as compared to the first quarter of the previous year.

The revenues from connection services to the distribution network are equal to Euro 29 thousand, with a decrease of Euro 112 thousand as compared to the first quarter of 2015. The revenues from the distribution companies of the Group are fully recognised among the non-current liabilities and posted to the profit and loss statement based on the useful life of the plants built.

________________________________________________________________________________________________

The revenues derived from services provided by distributors, being equal to Euro 1,483 thousand, show an increase of Euro 604 thousand as compared to the first quarter of the previous year.

The revenues from contributions made by the Authority for Electricity, Gas and water amount to Euro 3,052 thousand, recording an increase of Euro 970 thousand as compared to the previous year. The contributions are paid for the achievement of objectives set by the Authority itself in terms of energy saving and published by resolution, which defines the specific obligations of primary energy savings by the obligated distributors.

The contributions recognised as of 31st March 2016 are calculated by evaluating the quantities of energy efficiency certificates accrued as compared to the 2016 target (regulatory period June 2016 - May 2017). The unit contribution used for the economic quantification of the fulfilment of the obligation is equal to the fair value of the forecast contribution announced by GSE for the 2015 target (regulatory period June 2015 - May 2016) measured at 31st March 2016 and amounting to Euro 108.46 (source: STX).

The item "Other revenues" increased from Euro 1,330 thousand in the first quarter of 2015, to Euro 1,373 thousand in the period considered, showing an increase of Euro 42 thousand. The item includes Euro 396 thousand resulting from the execution of the agreements entered into with Veritas S.p.A. for the acquisition of the investee company Veritas Energia S.p.A., which require the seller to pay a compensation for trade receivables existing at the closing date and not cashed in within the two following years.

Costs

27. Cost for gas purchase

The following table reports the costs relating to the purchase of gas over the relevant financial periods:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Purchase costs for raw material (gas)	97,143	134,435
Purchase costs for raw material (gas)	97,143	134,435

At the end of the first quarter, the costs for natural gas procurement amounted to Euro 97,143 thousand, showing a decrease of Euro 37,292 thousand compared to the first quarter of 2015. The decrease in costs incurred is mainly explained by the trend of the price basket to which the raw material is adjusted as well as lower consumption recorded in the period considered. The procurement activity of the raw material to be sold to the end market has in fact involved the purchase of 349.1 million cubic metres, which translates into a decrease of 29.2 million in consumption.

In the period considered, the company purchased and stored natural gas for a total amount of Euro 1,414 thousand.

The accounting of the economic effects of the hedging derivatives accrued during the quarter considered has determined the recognition of costs totalling Euro 283 thousand which have increased the item by an equivalent amount.

It is to be noted that, during the financial period, no trading activities were performed and that the most significant amounts of natural gas for the supply to end customers were provided to the Ascopiave Group by the company Eni Gas & Power S.p.A..

28. Cost of other raw materials

The following table reports on costs relating to the purchase of other raw materials during the relevant financial periods:

________________________________________________________________________________________________

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Purchase of electricity	4,732	5,226
Purchase of other raw material	302	315
Purchase costs for other raw materials	5,034	5,541

At the end of the first quarter of 2016, the costs incurred for the purchase of other raw materials registered a decrease equal to Euro 507 thousand as compared to the first quarter of 2015, mainly explained by the lower costs incurred to procure electricity.

The costs incurred for the purchase of electricity showed a decrease of Euro 494 thousand, from Euro 5,226 thousand, to Euro 4,732 thousand in the reference period. The decrease is mainly explained by the decrease in kilowatt-hour traded (-7.4 million) which at the end of the period amounted to 349.1 million.

The costs incurred for the purchase of other raw materials register a decrease equal to Euro 13 thousand, from Euro 315 thousand in the first quarter of 2015, to Euro 302 thousand in the reference period. This item mainly includes costs related to the purchase of materials for the construction of natural gas distribution plants

29. Costs for services

Costs for services for the relevant periods are analysed in the following table:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Costs of conveyance on secondary networks	25,492	27,470
Costs for counting meters reading	218	357
Costs for mailing bills	143	136
Mailing and telegraph costs	400	303
Maintenance and repairs	787	788
Consulting services	1,249	1,060
Commercial services and advertisement	588	510
Sundry suppliers	452	936
Directors' and Statutory Auditors' fees	275	278
Insurances	206	236
Personnel costs	244	184
Other managing expenses	1,405	1,727
Costs for use of third-party assets	2,673	2,681
	129
Costs for services	34,263	36,668

The costs for services incurred during the first quarter of the year showed a decrease of Euro 2,405 thousand, from Euro 36,668 thousand in 2015, to Euro 34,263 thousand in the reference quarter. This variation is mainly explained by the lower costs related to the carriage costs on the secondary and primary networks (Euro -1,650 thousand), for the

transportation of electricity (Euro -329 thousand), and utilities services (Euro -485 thousand). This decrease is partially offset by the higher costs for consultancy services (Euro +322 thousand).

________________________________________________________________________________________________

The lower costs incurred for the transportation of natural gas are mainly explained by the decrease in consumption recorded in the period considered (-29.2 million cubic meters).

The costs incurred for consultancy services increase from Euro 1,060 thousand during the first quarter of 2015, to Euro 189 thousand in the first quarter of 2016. The increase is mainly explained by the costs incurred for the establishment of the company AP Reti Gas S.p.A..

Other operating costs decrease by Euro 323 thousand, mainly explained by the lower costs incurred for bank and postal fees (Euro -107 thousand).

The costs incurred for the use of third-party assets are fundamentally unchanged since the first quarter last year. The item mainly includes the fees paid to Local Authorities for the management of natural gas distribution concessions.

30. Costs for staff

The following table shows the breakdown of personnel costs in the years considered:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Wages and salaries	4,753	4,706
Social security contributions	1,792	1,511
Severance indemnity	289	280
Current severance indemnity actualization
Other costs	11	98
Totale costo del personale	6,844	6,595
Costo del personale capitalizzato	(1,173)	(853)
Costi del personale	5,672	5,742

The cost for staff is net of costs capitalised by the companies of natural gas distribution in comparison with increases in intangible assets for works performed on a time and material basis, which are directly attributed to the implementation of facilities for the distribution of natural gas and recorded as an asset.

Costs for staff increase from Euro 6,595 thousand in the first quarter of 2015 to Euro 6,844 thousand in the reference period, showing an increase of Euro 249 thousand. The increase is mainly explained by wage increases paid during the quarter due to personal rewards and increases provided for by contract.

The capitalised staff cost shows an increase equal to Euro 320 thousand, from Euro 853 thousand in the first quarter of 2015, to Euro 1,173 thousand in 2016, thus reducing the cost for staff by an equal amount.

The table below shows the average number of Group employees by category at the end of the indicated periods:

Type	1st Quarter 2016	1st Quarter 2015	Variation
Executives	17	17	0
Office workers	361	350	12
Manual workers	103	101	2
Total employees	481	467	14

31. Other operating costs

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Provision for risks on credits	616	835
Membership and AEEG fees	169	94
Capital losses	3
Extraordinary losses	25	53
Other taxes	214	205
Other costs	125	223
Costs of contracts	94	151
Energy efficency certificates	3,786	2,082
Other management costs	5,032	3,643

The following table shows the breakdown of other operating costs in the periods considered:

Other operating costs, increasing from Euro 3,643 thousand in the first quarter of 2015 to Euro 5,032 thousand in the first quarter of 2016, show an increase of Euro 1,390 thousand, mainly due to higher costs incurred for the purchase of Energy efficiency certificates (Euro +1.704 thousand), partially offset by lower allowances for doubtful accounts (Euro -219 thousand) made possible thanks to the appropriate capacity of the bad debt provision.

________________________________________________________________________________________________

The costs recognised as of 31st March 2016 for the purchase of energy efficiency certificates are calculated by evaluating the amounts of certificates accrued as compared to the 2016 target (regulatory period June 2016 - May 2017). The unit cost is the fair value of the prices recorded in the relevant market, calculated on 31st March 2016 and amounting to Euro 128.89 (source: STX).

32. Other operating revenues

The following table shows a breakdown of other operating income in the periods considered:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Other income	21	5
Other income	21	5

At the end of the reference period, the item "other operating income" shows an increase of Euro 15 thousand, from Euro 5 thousand in 2015, to Euro 21 thousand.

33. Amortisation and depreciation

Amortisation and depreciation for the relevant periods are analysed in the following table:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Intangible fixed assets	4,478	4,195
Tangible fixed assets	607	635
Amortization and depreciation	5,084	4,830

Amortisation and depreciation record an increase of Euro 254 thousand, from Euro 4,830 thousand in the first quarter of 2015, to Euro 5,084 thousand in the reference period.

________________________________________________________________________________________________

Financial income and expense

34. Financial income and expense

The following table shows a breakdown of financial income and expenses in the periods considered:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Interest income on bank and post office accounts	9	196
Other interest income	117	189
Other financial income	1	1
Financial income	126	386
Interest expense on banks	65	269
Interest expense on loans	120	177
Other financial expenses	52	12
Financial charges	237	458
Evaluation of subsidiary companies with net equity method	146	157
Evaluation of jointly controlled companies with net equity method	3,441	3,295
Evaluation of subsidiary companies with the net equity method	3,587	3,452
Total net financial expenses	3,475	3,379

At the end of the first quarter of 2016, the balance between financial income and expenses showed a loss of Euro 111 thousand, an increase from the same period of the previous year of Euro 39 thousand.

The increase is explained by the combined effect of the failure to perform during the first quarter of 2016 arbitrage transactions on interest rates, which had instead characterised the first quarter of 2015, the reduction in interest rates applied by banks to lines of credit and by the improvement of the Group's financial position, which reduced the recourse to lines of credit.

The item "Evaluation of associated companies using the equity method" amounts to Euro 146 thousand and includes the use of a portion of the bad debt provision for the coverage of the capital deficit of the affiliate company Sinergie Italiane S.r.l. in liquidation following the profit achieved during the period as detailed in the section "Shareholdings" of these explanatory notes. The item registers a decrease as compared to the same period of the previous year equal to Euro 11 thousand.

The item "Result quota from jointly controlled companies" includes the net results achieved by the jointly controlled companies in the reference period; they have increased by Euro 146 thousand, totalling Euro 3,441 thousand.

Taxes

35. Taxes in the reference period

The table below shows the breakdown of income taxes over the periods considered, distinguishing the current component from the deferred and advance ones:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
IRES current taxes	8,075	8,394
IRAP current taxes	1,410	1,399
(Advance)/Deferred taxes	157	(603)
Taxes for the period	9,642	9,190

Taxes increase from Euro 9,190 thousand in the first quarter of 2015 to Euro 9,642 thousand in the reference period, thus registering an increase of Euro 452 thousand. The increase recorded is mainly explained by the higher profit achieved in the reference period.

________________________________________________________________________________________________

The table below shows the incidence of tax on the result before tax for the periods considered:

	1st Quarter 2016	1st Quarter 2015
(Thousands of Euro)
Earnings before tax	33,780	32,022
Taxes for the period	9,642	9,190
Percentage of income before taxes	28.5%	28.7%

The tax-rate in the first quarter of 2016 is equal to 28.5%, marking a decrease of 0.2% as compared to the same period of the previous year.

Non-recurrent components

Pursuant to CONSOB communication no.15519/2005 it is noted that no non-recurrent economic components exist as of 31st March 2016 in this interim report.

Transactions deriving from unusual and/or atypical operations

In accordance with CONSOB communication no. DEM/6064296 dated 28th July 2006, we report that in the first quarter of 2016 no unusual and/or atypical operations occurred.

OTHER COMMENTS ON THE ANNUAL FINANCIAL REPORT AS OF 31st MARCH 2016

________________________________________________________________________________________________

Commitments and risks

Guarantees given

As of 31st March 2016, the Group provided the following guarantees:

Guarantees to companies within the consolidation area

(Thousands of Euro)	31st March 2016	31th Decembre 2015
On credit lines	6,400	6,400
On financial leasing agreements	956	956
Guarantees on credit lines (letter of comfort)	1,653	1,653
On execution of works (letter of comfort)	943	943
Agreements on incentives art. 4 of Law no. 92/2012	93	119
On UTF offices and regions for taxes on gas (letter of comfort)	6,232	6,232
On UTF offices and regions for taxes on electricity (letter of comfort)	669	669
On distribution concession (letter of comfort)	6,187	2,789
On conveyance agreements (letter of comfort)	6,989	8,778
On agreements for transport of electricity (letter of comfort)	16,783	13,849
On active agreements of electricity administration (letter of comfort)
On purchase of gas agreements (letter of comfort)	578	556
On purchase of electricity agreements (letter of comfort)	2,000	2,000
On contest	19	19
On storage of natural gas service	520	110
On active gas supply contracts	4
Total	50,026	45,072

Guarantees to the jointly controlled companies and affiliate companies assessed with the equity method:

(Thousands of Euro)	31st March 2016	31th Decembre 2015
On credit lines	34,333	34,333
On execution of works (letter of comfort)	8	8
On UTF offices and regions for taxes on gas (letter of comfort)	928	928
On UTF offices and regions for taxes on electricity (letter of comfort)	79	79
On distribution concession (letter of comfort)	180	180
On conveyance agreements (letter of comfort)	671	671
On agreements for transport of electricity (letter of comfort)	406	406
On leases	114	114
Total	36,719	36,719

The letters of comfort on lines of credit and gas purchase contracts issued in favour of the subsidiary Sinergie Italiane S.r.l. in liquidation amount as of 31st March 2016 to Euro 34,333 thousand (Euro 34,333 thousand as of 31st December 2015).

Risk and uncertainty factors

Management of financial risk: objectives and criteria

The investments in the operative activities of the Group mainly consist of bank loans, financial leasing, lease contracts with the possibility of purchase and bank deposits at sight and short-term. The recourse to such forms of investment exposes the Group to the risk connected with the fluctuation of interest tax rate, that successively determine possible variations on financial costs.

The operative activity, on the contrary, put the Group on the position of possible receivable risks with the counterparts. The Group, furthermore, is subject to liquidity risks because the available financial resources may not be sufficient to meet its financial obligations, in the terms and deadlines forecast.

______________________________________________________________________________________________

The Board of Directors re-examines and agrees the policies for risk management, described hereinafter.

Interest rate risks

Because of the seasonality of the natural gas business cycle, the Group aims at managing the need for cash by means of temporary and medium-term loans mainly at variable rates.

________________________________________________________________________________________________

Furthermore, the Group manages medium-long term financings at variable rates with primary bank institutions, with an outstanding debt as of 31st March 2016 of Euro 51,329 thousand and due dates between 1st April 2016 and 5th February 2026.

Furthermore, the Group manages credit lines at fixed rates (loans) for minor amounts, which originated upon assignment of gas distribution networks by local authorities that are now partners of Asco Holding S.p.A., that will expire within the end of the fiscal year.

The medium - long term loans are mainly represented by the loan granted in August 2013 by the European Investment Bank with an outstanding debt of Euro 36,250 thousand as of 31st March 2016, and by the loan granted in 2011 by Unicredit S.p.A. with an outstanding debt of Euro 14,286 thousand as of 31st March 2016, subject to a securitisation operation by the lender. Both are subject to covenants which are met.

For further details, please see paragraph no. 16 "Medium- long term loans".

Sensitivity analysis of the interest rate risk

The following table shows the impacts on the Group's Pre-tax result of the possible variations in interest rates in a reasonably possible interval.

	January	February	March
Net Financial Position 2016	(120,610)	(94,608)	(70,635)
Positive average rate	0.01%	0.01%	0.01%
Negative average rate	0.63%	0.66%	0.71%
Positive average rate increased of 200 basis point	2.01%	2.01%	2.01%
Negative average rate increased of 200 basis point	2.63%	2.66%	2.71%
Positive average rate decreased of 50 basis point	0.00%	0.00%	0.00%
Negative average rate decreased of 50 basis point	0.13%	0.16%	0.21%
Net Financial Position recalculated with increase of 200 basis point	(120,815)	(94,759)	(70,755)
Net Financial Position recalculated with decrease of 50 basis point	(120,559)	(94,571)	(70,605)	Total
Effect to income before taxes with increase of 200 basis point	(205)	(150)	(120)	(475)
Effect to income before taxes with decrease of 50 basis point	51	38	30	119

The sensitivity analysis, obtained by simulating a variation on interest tax rates applied on the credit lines of the Group equal to 50 basis points in decrease (with a minimum limit of zero basis points) and 200 basis points in increase, maintaining unchanged all the other variables, leads to an estimation of an effect on the result before taxes which is negative for Euro 475 thousand (2015: Euro 656 thousand) or positive for Euro 119 thousand (2015: Euro 164 thousand).

Receivable risk

The operative activity put the Group in a position of possible receivable risk caused by the missed respect of trading obligations between the counterparts.

The Group constantly monitors this type of risk through an appropriate credit management procedure, helped in that sense also by the division of a significant component of accounts receivable. The policy prescribes to fully write down the receivables that show an older expiry date than the year (that is to say which have expired for over a year) and in any case all the existing receivables from insolvent clients or clients subject to bankruptcy proceedings, and to apply

write-down percentages determined by historical series on the most recent receivables, checking the capacity of the allowance for bad debts, so that it can entirely cover all receivables having an ageing higher than 12 months and most receivables expired between 6 and 12 months.

________________________________________________________________________________________________

Liquidity risk

The liquidity risk concerns the risk that the Group is not able to meet its financial obligations because of insufficient financial resources, in the expected terms and deadlines, due to the impossibility of raising new funds or selling assets on the market, affecting the income statement if the Group is obliged to incur additional costs to meet its obligations, or in case of insolvency entailing risks for the business.

The Group constantly aims at highest balance and flexibility of financing sources and uses, minimising that risk. The two main factors influencing Group liquidity are on the one hand the resources generated or absorbed by the operative or investment assets, on the other hand the expiry characteristics and debt renewal.

Risk of prices of raw materials

The company is exposed to the risk of fluctuation of the cost of the raw material due to the misalignment between the baskets of tariff index of natural gas sale and the basket of purchase costs index, which can be different.

In order to reduce the afore-stated risk, the company subscribed contracts of provisioning that envisage the almost full coverage of the indexing clauses of cost in the raw material purchase portfolio and of the indexing clauses of price in the sale portfolio.

The risk is therefore connected to possible volume mismatchings between the amounts in the final balance underlying the various indexing formulas and the related amounts budgeted on the basis of which the purchase portfolio has been structured.

Risk management and control policy

Since September 2015, the Group has been adopting the "Energy and Financial Risk Management and Control" policy, aimed at containing the volatility implied by energy risks on overall margins and at stabilising cash flows, as well as at maintaining the balance between funding sources and uses and containing funding costs.

In accordance with the provisions of the Policies, the Group will be able to resort to derivatives for hedging purposes, in order to reduce or mitigate those risks, following the "Compliance with EMIR Regulation" Procedure, which defines the criteria and rules through which the Ascopiave Group fulfils its obligations under the EU Regulation no. 648/2012 – European Market Infrastructure Regulation, concerning the risk mitigation techniques associated with the use of derivative hedging instruments, required to make these operations as transparent as possible to the market.

Price risk management and methods of accounting presentation

The Group is exposed to commodity price risk due to its operations in the gas and electricity sectors; the overall objective of risk management is to reduce the impact on the Group's Income statement of the effects arising from the portfolio purchases and sales as a result of changes in market prices.

The risk exposure is currently defined in terms of volumetric gap between the different indexing formulas of contracts in portfolio and taking into consideration, therefore, any natural hedging situations in the portfolio; as concerns risk management activities, the Group uses derivative financial instruments and specifically Swap transactions in order to reduce the overall exposure of the portfolio, through a reduction in the gaps detected between the different formulas.

The derivative instruments that may be used by the Group are Commodity swaps on the price of gas and/or Contracts For Difference on the price of electricity which involve the periodic swap of a differential between a fixed price and a variable price indexed to a specific market benchmark.

________________________________________________________________________________________________

As of 31st March 2016, the three existing derivative instruments, detailed in section "25. Current liabilities from derivative financial instruments" whose mark to market totals Euro -190 thousand, are prospectively and retrospectively effective.

Specific risks in the business sectors in which the Group operates

Regulations

The activities carried out by the Ascopiave Group in the gas sector are subject to regulations. Directives and regulatory measures adopted in the European Union and by the Italian Government, as well as the resolutions of the Authority for Electricity, Gas and Water can have a significant impact on the operations, the operating results and the financial balance. Future changes in the regulatory policy adopted by the European Union or at a national level could have unexpected effects on the regulatory reference framework and, consequently, on the activity and results of the Ascopiave Group.

Management of Capital

The primary objective of the management of the Group's capital is to guarantee that a solid credit rating is maintained, as well as suitable levels of the capital indicator. The Group can adapt the dividends paid to shareholders, reimburse capital or issue new shares.

The Group checks its capital by means of a debt/capital ratio.

The Group includes financial charges, trade and other payables in its net debt, net of liquid funds and equivalent.

(Thousands of Euro)	31.03.2016	31.12.2015	31.03.2015
Financial position in the short term	(28,189)	(69,786)	(61,319)
financial position in the medium-long term	(42,447)	(44,250)	(51,857)
Financial gross debt	70,635	114,037	113,176
Share capital	234,412	234,412	234,412
Own shares	(17,521)	(17,521)	(17,660)
Reserves	204,920	160,233	194,353
Undistributed net profit	22,651	43,014	21,394
Total Net equity	444,461	420,137	432,498
Total capital and gross debt	515,097	534,173	545,675
Debt/Net assets ratio	0.16	0.27	0.26

The debt/net equity ratio as of 31st March 2016 is 0.16, a decrease as compared to 31st December 2015, equal to 0.27, and also as compared to 31st March 2015, when it amounted to 0.26.

________________________________________________________________________________________________

The decrease in this indicator is related to the combined effect of the increase in the Net financial position (Euro +43,402 thousand in the first quarter of 2016 and Euro 42,541 thousand as at 31st March 2015), and the Shareholders' equity, which has increased by Euro 24,324 thousand as compared to 31st December 2015 and Euro 11,963 thousand as compared to 31st March 2015.

Representation of financial assets and liabilities by categories

The breakdown of financial assets and liabilities by categories and their fair value (IFRS 13) as of 31 st March 2016 and 31st December 2015 is as follows:

						31.03.2016
A	B	C	D	E	F	Totale	Fair value
			14,820			14,820	14,820
			0			0	0
			235,041			235,041	235,041
			3,487			3,487	3,487
			28,301			28,301	28,301
					42,042	42,042	42,042
					12,013	12,013	12,013
					404	404	404
					55,950	55,950	55,950
					207,523	207,523	207,523
					721	721	721
	252					252	252
						31.12.2015
A	B	C	D	E	F	Totale	Fair value
			15,366			15,366	16,741
			0			0	3,124
			210,217			210,217	215,077
			3,487			3,487	8,234
			28,301			28,301	100,882
					43,829	43,829	53,456
					12,054	12,054	12,351
					422	422	3,327
					97,866	97,866	184,851
					163,224	163,224	161,622
					3,708	3,708	280
	252					252	0

______________________________________________________________________________________________

Legend

A - Assets and liabilities at fair value directly recognised in the Profit and Loss Account

B - Assets and liabilities at fair value directly recognised in Equity (including hedging derivatives)

C - Investments held to maturity

D - Assets for granted loans and receivables (including cash equivalents)

E - Assets available for sale

F - Financial liabilities recognised at amortised cost

Business segment reporting

The sector information is provided with reference to the business sectors in which the Group operates. Business sectors are identified as primary segments of activities. The criteria used for identifying the activity segments have been inspired by the methods whereby management runs the Group and assigns managerial responsibilities.

________________________________________________________________________________________________

Based on the information required by the IFRS 8 "Business Segment Reporting, Operative segments", the company has identified as segments subjects of the reporting the activities of gas and electricity sales and distribution.

Information for geographic sectors is not provided, since the Group does not have any business activity outside of the national territory.

The following tables show the information on revenues concerning the business segments of the Group for the first quarter of 2016 and the first quarter of 2015.

1stQ 2016	Gas	Gas sale	Electricity	Other	Elisions	Total
(Thousand of Euro)	distribution		sale
Net revenues of third-party customers	18,376	148,358	15,446	331		182,512
Intra-group revenues among the segments	23,731	289	8,452	0	(32,472)	0
Segment revenues	42,107	148,647	23,898	331	(32,472)	182,512

1stQ 2015 (Thousand of Euro)	Gas distribution	Gas sale	Electricity sale	Other	Elisions	Total
Net revenues of third-party customers	15,613	187,937	15,753	193		219,496
Intra-group revenues among the segments	22,263	1,000	8,309	0	(31,573)	0
Segment revenues	37,876	188,937	24,062	193	(31,573)	219,496

Transactions with related parties

The transactions with related parties in the financial period considered are detailed in the following tables:

	Trade	Other	Trade	Other		Costs			Revenues
(Thousands of Euro)	receivables	receiva	payables	payable	Goods	Services	Other		Goods Services Other
Parent company
ASCO HOLDING S.P.A.	14	0		0	0		8,341	0	14	170
Total parent company	14	0	0	0	0	0	8,341	0	14	170
Affiliated companies
ASCO TLC S.P.A.	82	52	52		0		0	0	31	73
SEVEN CENTER S.R.L.	10	0	25	0	0	24	0	0	10	0
Total affiliated companies	92	52	77	0	0	24	0	0	41	73
Subsidiary companies
Estenergy S.p.A.	52	0	13	0	0		0	0	0	0
ASM SET S.R.L.	788	0	6	449	12	5	3	1,786	117	6
Unigas Distribuzione Gas S.r.l.	52	0	2,981	0	0	4,202	0	23	19	0
SINERGIE ITALIANE S.R.L.	14	9,900	9,900	0	10,293		0	0	17	0
Total subsidiary companies	879	9,900	12,873	449	10,305	4,206	3	1,809	153	6
Total	985	9,952	12,950	449	10,305	4,230	8,344	1,809	209	249

In the first three months of 2015, in addition, Ascopiave S.p.A., Ascotrade S.p.A., Asm DG S.r.l., Edigas Distribuzione S.r.l., Pasubio Servizi S.r.l., Blue Meta S.p.A. and Veritas Energia S.p.A. joined the consolidation of the tax relationships of the parent company Asco Holding S.p.A., recorded under the items "Other current assets" and "Other

current liabilities".

As far as the jointly controlled companies are concerned:

• Estenergy S.p.A.:
• o The costs for assets are related to the purchase of electricity by Etra Energia S.r.l. and Ascotrade S.p.A.;
• o The revenues for services are connected to services of gas transportation by Ascopiave S.p.A.;

________________________________________________________________________________________________

• o The other revenues relate to interests on the intragroup current account.
• ASM Set S.r.l.:
• o The other receivables: are related to intragroup current account agreements with Ascopiave S.p.A.;
• o The costs for assets are related to the purchase of Gas with Asm Dg S.r.l.;
• o The costs for assets are related to the purchase of Electricity with Veritas Energia S.p.A.;
• o The costs for services are connected to administrative services provided to Ascopiave S.p.A.;
• o The other costs relate to interest payable on the current account with Ascopiave S.p.A.;
• o The revenues for services are connected to gas transportation revenues and distribution services with Asm DG S.r.l.;
• o The other revenues relate to interests accrued on the current account with Ascopiave S.p.A..
• Unigas Distribuzione S.r.l.;
• o The costs for services are connected to gas transportation costs and distribution services with Blue Meta S.p.A.;
• The revenues for assets concern the gas sale with Blue Meta S.p.A..

Costs for services to the subsidiary Asco TLC S.p.A. refer to a rental fee for the servers. Revenues for the aforementioned subsidiary derive from the contract to supply gas and electrical energy and from service contracts drawn up between the parties.

The costs for assets due to Sinergie Italiane S.r.l. in liquidation relate to the purchase of natural gas for the first three months of 2015 made by Ascotrade S.p.A. while costs and revenues for services relate to service contracts between the parties and re-invoicing of consultancy.

It is also noted that the letters of comfort on lines of credit and on gas purchase contracts issued in favour of the subsidiary Sinergie Italiane S.r.l in liquidation amount to Euro 34,333 thousand as of 31st March 2016 (unchanged value as compared to 31st December 2015).

The costs for services for the subsidiary Seven Centre S.r.l. mainly refer to maintenance services for the natural gas distribution network.

Furthermore:

• the economic relations between the companies of the Group and the subsidiary companies occur at market prices and are eliminated in the process of consolidation;
• the operations set up by the companies of the Group with correlated parties are part of normal management activity and are regulated at market prices;
• with reference to the provisions of art. 150, paragraph 1 of Legislative Decree no. 58 of 24th February 1998, no operations have been carried out that could potentially represent a conflict of interest with companies of the Group, by members of the Board of Directors.

Financial statements representation pursuant to Consob resolution 15519/2006

Please find below the Financial statements representation showing the effects of the transactions with related parties pursuant to Consob resolution no.15519 dated 27th July 2006.

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Consolidated assets and liabilities statement

						Of which related parties						Of which related parties
(Thousands of Euro)		31.03.2016	A	B	C	D Total	%	31.12.2015	A	B	C	D	Total	%
ASSETS
Non-current assets
Goodwill	(1)	80,758	0	0	0	0 0	0.0%	80,758	0	0	0	0	0	0.0%
Other intangible assets	(2)	315,802	0	0	0	0 0	0.0%	316,659	0	0	0	0	0	0.0%
Tangible assets	(3)	34,873	0	0	0	0 0	0.0%	34,987	0	0	0	0	0	0.0%
Shareholdings	(4)	71,519	0		0 71,518	0 71,518 100.0%		68,078	0		0 68,078	0		68,078 100.0%
Other non-current assets	(5)	14,820	0	0	0	0 0	0.0%	15,366	0		0 12,015	0	12,015	78.2%
Non current financial assets	(6)	0	0	0	0	0 0	0.0%	0	0	0	0	0	0	0.0%
Advance tax receivables	(7)	10,848	0	0	0	0 0	0.0%	11,333	0	0	0	0	0	0.0%
Non-current assets		528,620	0		0 70,657	0 70,657	13.4%	527,182	0		0 75,203	0	75,203	14.3%
Current assets			0	0	0	0 0	0.0%		0	0	0	0	0	0.0%
Inventories	(8)	3,511	0	0	0	0 0	0.0%	3,577	0	0	0	0	0	0.0%
Trade receivables	(9)	213,901	14	92	879	0 985	0.5%	172,022	3	99	1,402	0	1,504	0.9%
Other current assets	(10)	30,487	0	52	9,900	0 9,952	32.6%	46,518	3,696	0	0	0	3,696	7.9%
Current financial assets	(11)	659	0	0	0	0 0	0.0%	3,487	0		0 1,931	0	1,931	55.4%
Tax receivables	(12)	1,368	0	0	0	0 0	0.0%	1,368	0	0	0	0	0	0.0%
Cash and cash equivalents	(13)	27,823	0	0	0	0 0	0.0%	28,301	0	0	0	0	0	0.0%
Current assets		277,750	14	92	879	0 985	0.4%	255,272	3,699	99	3,333	0	7,131	2.8%
ASSETS		806,370	14		92 71,536	0 71,642	8.9%	782,454	3,699		99 78,535	0	82,334	10.5%
Net equity and liabilities			0	0	0	0 0	0.0%		0	0	0	0	0	0.0%
Total Net equity			0	0	0	0 0	0.0%		0	0	0	0	0	0.0%
Share capital		234,412	0	0	0	0 0	0.0%	234,412	0	0	0	0	0	0.0%
Own shares		(17,521)	(0)	(0)	(0)	(0) (0)	0.0%	(17,521)	(0)	(0)	(0)	(0)	(0)	0.0%
Reserves		221,191	0	0	0	0 0	0.0%	198,374	0	0	0	0	0	0.0%
Net equity of the Group		438,081	0	0	0	0 0	0.0%	415,264	0	0	0	0	0	0.0%
Net equity of Others		6,380	0	0	0	0 0	0.0%	4,873	0	0	0	0	0	0.0%
Total Net equity	(14)	444,461	0	0	0	0 0	0.0%	420,137	0	0	0	0	0	0.0%
Non-current liabilities			0	0	0	0 0	0.0%		0	0	0	0	0	0.0%
Provisions for risks and charges	(15)	7,215	0	0	0	0 0	0.0%	7,360	0	0	0	0	0	0.0%
Severance indemnity	(16)	3,906	0	0	0	0 0	0.0%	3,864	0	0	0	0	0	0.0%
Medium- and long-term bank loans	(17)	42,042	0	0	0	0 0	0.0%	43,829	0	0	0	0	0	0.0%
Other non-current liabilities	(18)	19,632	0	0	0	0 0	0.0%	18,903	0	0	0	0	0	0.0%
Non-current financial liabilities	(19)	404	0	0	0	0 0	0.0%	422	0	0	0	0	0	0.0%
Deferred tax payables	(20)	19,242	0	0	0	0 0	0.0%	19,571	0	0	0	0	0	0.0%
Non-current liabilities		92,443	0	0	0	0 0	0.0%	93,948	0	0	0	0	0	0.0%
Current liabilities			0	0	0	0 0	0.0%		0	0	0	0	0	0.0%
Payables due to banks and financing institutions	(21)	55,950	0	0	0	0 0	0.0%	97,866	0	0	0	0	0	0.0%
Trade payables	(22)	109,220	0		77 12,873	0 12,951	11.9%	122,823	0		315 13,043	0	13,358	10.9%
Tax payables	(23)	2,323	0	0	0	0 0	0.0%	397	0	0	0	0	0	0.0%
Other current liabilities	(24)	101,062	0	0	0	0 0	0.0%	43,324	7,264	0	0	0	7,264	16.8%
Current financial liabilities	(25)	721	0	0	449	0 449	62.3%	3,708	0	0	0	0	0	0.0%
Current liabilities from derivative financial instruments(26)		190	0	0	0	0 0	0.0%	252	0	0	0	0	0	0.0%
Current liabilities		269,466	0	25	3,423	0 3,448	1.3%	268,370	7,264		315 13,043	0	20,623	7.7%
Liabilities		361,909	0	25	3,423	0 3,448	1.0%	362,317	7,264		315 13,043	0	20,623	5.7%
Net equity and liabilities		806,370	0	25	3,423	0 3,448	0.4%	782,454	7,264		315 13,043	0	20,623	2.6%

______________________________________________________________________________________________

Legend for the Related parties column heading:

A Parent companies

B Associates

C Affiliates and Jointly controlled companies

D Other related parties

Income statement and overall consolidated income statement

		1st							1st
		Quarter			Of which related parties				Quarter			Of which related parties
(Thousands of Euro)	Note	2016	A	B	C	D	Total	%	2015	A	B	C	D	Total	%
Revenues	(26)	182,512	14	114	1,968	0	2,096	1.1%	219,496	3	122	2,722	0	2,847	1.3%
Total operating costs		147,123	0	24	14,511		14,535	9.9%	186,023	0	185	20,257	0	20,442	11.0%
Purchase costs for raw material (gas)	(27)	97,143	0	0	10,299	0	10,299	10.6%	134,435	0	0	16,122	0	16,122	12.0%
Purchase costs for other raw materials	(28)	5,034	0	0	6	0	6	0.1%	5,541	0	0	0	0	0	0.0%
Costs for services	(29)	34,263	0	24	4,206	339	4,569	13.3%	36,668	0	185	4,135	340	4,661	12.7%
Costs for personnel	(30)	5,672	0	0	0		0	0.0%	5,742	0	0	0	0	0	0.0%
Other management costs	(31)	5,032	0	0	0	0	0	0.0%	3,643	0	0	0	0	0	0.0%
Other income	(32)	21	0	0	0	0	0	0.0%	5	0	0	0	0	0	0.0%
Amortization and depreciation	(33)	5,084	0	0	0	0	0	0.0%	4,830	0	0	0	0	0	0.0%
Operating result		30,304	14	90	(12,544)		(12,439)	-41.0%	28,642	3	63	17,535	0	17,595	-61.4%
Financial income	(34)	126	0	0	0		0	0.0%	386	0	0	1	0	1	0.3%
Financial charges	(34)	237	0	0	3		3	1.1%	458	0	0	2	0	2	0.5%
Evaluation of subsidiary companies with the net equity method	(34)	3,587	0	(1)	(0)		(0)	0.0%	3,452	(0)	(4)	(0)	(0)	(4)	-0.1%
Earnings before tax		33,780	14	90	(12,546)		(12,442)	-36.8%	32,022	3	67	17,536	0	17,600	-55.0%
Taxes for the period	(35)	9,642	8,171	0	0		8,171	84.7%	9,190	6,770	0	0	0	6,770	73.7%
Result for the period		24,138	(8,157)	90	(12,546)		(20,613)	-85.4%	22,832	6,767	67	17,536	0	24,370	-106.7%
Net result for the period		24,138	(8,157)	90	(12,546)		(20,613)	-85.4%	22,832	6,767	67	17,536	0	24,370	-106.7%
Group's Net Result		22,651	0	0	0		0	0.0%	21,394	0	0	0	0	0	0.0%
Third parties Net Result		1,487	(0)	(0)	(0)		(0)	0.0%	1,438	(0)	(0)	(0)	(0)	(0)	0.0%
Consolidated statement of comprehensive income		(0)	(0)	(0)	(0)		(0)	0.0%	(0)	(0)	(0)	(0)	(0)	(0)	0.0%
1. Components that can be reclassified to the income statement		(0)	(0)	(0)	(0)		(0)	0.0%	(0)	(0)	(0)	(0)	(0)	(0)	0.0%
Fair value of derivatives, changes in the period net of tax		(194)	(0)	(0)	(0)		(0)	0.0%	(0)	(0)	(0)	(0)	(0)	(0)	0.0%
2. Components that can not be reclassified to the income statement Actuarial (losses)/gains from remeasurement on defined-benefit		(0)	(0)	(0)	(0)		(0)	0.0%	(0)	(0)	(0)	(0)	(0)	(0)	0.0%
obligations net of tax		190	(14)	(0)	(0)		(14)	-7.1%	(253)	(0)	(0)	(0)	(0)	(0)	0.0%
Total comprehensive income		24,134	(8,170)	90	(12,546)		(20,627)	-85.5%	22,579	6,767	67	17,536	0	24,370	-107.9%
Group's overall net result		22,664	(8,153)	108	(12,528)		(20,609)	-90.9%	21,144	(6,749)	(49)	(17,518)		(24,353)	-115.2%
Third parties' overall net result		1,469	(18)	(18)	(18)		(18)	-1.2%	1,435	(18)	(18)	(18)		(18)	-1.2%
Base income per share		0.102	0.000	0.000	0.000	0.000	0.000	0.0%	0.096	0.000	0.000	0.000	0.000	0.000	0.0%
Diluted net income per share		0.102	0.000	0.000	0.000	0.000	0.000		0.096	0.000	0.000	0.000	0.000	0.000	0.0%

______________________________________________________________________________________________

________________________________________________________________________________________________

Legend for the Related parties column heading:

A Parent companies

B Associates

C Affiliates and Jointly controlled companies

D Other related parties

Consolidated financial statement

Ascopiave Group

				Of which related parties					Of which related parties
	First							First
	quarter	A	B	C	D	Total	%	quarter	A	B	C	D	Total	%
(thousands of Euro)	2016							2015
Net income of the Group	22,651							21,394
Cash flows generated (used) by operating activities
Adjustments to reconcile net income to net cash
Third-parties operating result	1,487					0	0%	1,438					0	0%
Amortization	5,084					0	0%	4,830					0	0%
Bad debt provisions	616					0	0%	835					0	0%
Variations in severance indemnity	43					0	0%	29					0	0%
Current assets / liabilities on financial instruments	(62)					0	0%	0					0	0%
Net variation of other funds	0					0	0%	(94)					0	0%
Evaluation of subsidiaries with the net equity method	(3,586)		(68,748)			(68,748)	1917%	(3,452)	0	0	0	0	0	0%
Losses / (gains) on disposal of fixed assets	(396)					0	0%	0					0
Interests paid	(297)					0	0%	(543)					0	0%
Interest expense for the year	237					0	0%	454					0	0%
Taxes for the year	7,955					0	0%	9,190					0	0%
Variations in assets and liabilities
Inventories	65					0	0%	(89)					0	0%
Accounts payable	(42,495)	(3)	(99)	(1,402)	0	(1,504)	4%	(82,220)	(12)	(120)	(1,358)		0 (1,490)	2%
Other current assets	16,031	(3,696)	0		0 0	(3,696)	-23%	32,977	(3,153)	0	0		0 (3,153)	-10%
Trade payables	(13,603)					0	0%	(8,719)	15	166	11,933	0	12,114	-139%
Other current liabilities	52,053	7,264	0		0 0	7,264	14%	43,044	7,357	0	0	0	7,357	17%
Other non-current assets	546	0		0 (12,015)	0	(12,015)	-2201%	8					0	0%
Other non-current liabilities	729	0	0		0 0	0	0%	502					0	0%
Total adjustments and variations	24,408	3,565	(68,847)	(13,417)		0 (78,699)	-322%	(1,807)	4,207	46	10,575	0	14,828	-820%
Cash flows generated (used) by operating activities	47,059	3,565	(68,847)	(13,417)		0 (78,699)	-167%	19,587	4,207	46	10,575	0	14,828	76%
Cash flows generated (used) by investments
Investments in intangible assets	(3,606)					0	0%	(3,092)					0	0%
Investments in tangible assets	(507)					0	0%	(86)					0	0%
Cash flows generated/(used) by investments	(4,113)	0	0		0 0	0	0%	(3,178)	0	0	0	0		0%
Cash flows generated (used) by financial activities
Net changes in debts due to other financers	(2,460)	0	0		0 0	0	0%	(16)					0	0%
Net changes in short-term bank borrowings	(31,202)					0	0%	(53,267)					0	0%
Net variation in current financial assets and liabilities	2,678	0	0	(1,931)	0	(1,931)	-72%	5,316	0		0 (8,256)		0 (8,256)	-155%
Interest expense	60					0	0%	88					0	0%
Ignitions loans and mortgages	16,000					0	0%	50,500					0	0%
Redemptions loans and mortgages	(28,500)					0	0%	(80,000)					0	0%
Cash flows generated (used) by financial activities	(43,424)	0	(0)	(1,931)	0	(1,931)	4%	(49,664)	0		0 (8,256)		0 (8,256)	17%
Variations in cash	(478)					0	0%	(33,255)						0%
Cash and cash equivalents at the beginning of the period28,301						0	0%	100,882						0%
	27,823					(0)	0%	67,627						0%
Cash and cash equivalents at the end of the period

________________________________________________________________________________________________

Legend for the Related parties column heading:

A Parent companies

B Associates

C Affiliates and Jointly controlled companies

D Other related parties

Consolidated net debt

	Of which related parties			Of which related parties
(migliaia di Euro)	31.03.2016	A B C	D Total	%	31.12.2015	A B C	D Total	%
A Cash and cash equivalents on hand		14 0 0	0 0 0	0.0%		15 0 0	0 0 0	0.0%
B Bank and post office deposits	27,809 0 0		0 0 0	0.0%	28,286 0 0		0 0 0	0.0%
C Securities held for trading		0 0	0 0 0	0.0%		0 0	0 0 0	0.0%
D Liquid assets (A) + (B) + (C)	27,823 0 0		0 0 0	0.0%	28,301 0 0		0 0 0	0.0%
E Current financial assets	659 0 0		0 0 0	0.0%	3,487 0 0		0 0 0	0.0%
F Payables due to banks	(46,322) 0 0		0 0 0	0.0%	(88,238) 0 0		0 0 0	0.0%
G Current portion of medium-long-term loans	(9,628) 0 0		0 0 0	0.0%	(9,628) 0 0		0 0 0	0.0%
H Current financial liabilities		(721) 0 0 (449) 0 (449) 62.3%					(3,708) 0 0 (249) 0 (249)	6.7%
I Current financial indebtedness (F) + (G) + (H)		(56,671) 0 0 (449) 0 (449)		0.8%			(101,574) 0 0 (249) 0 (249)	0.2%
J Net current financial indebtedness (I) - (E) - (D)		(28,189) 0 0 (449) 0 (449)		1.6%			(69,786) 0 0 (249) 0 (249)	0.4%
K Medium- and long-term bank loans	(42,042) 0 0		0 0 0	0.0%	(43,829) 0 0		0 0 0	0.0%
L Non current financial assets		0 0 0	0 0 0	0.0%		0 0 0	0 0 0	0.0%
M Non-current financial liabilities	(404) 0 0		0 0 0	0.0%	(422) 0 0		0 0 0	0.0%
N Non-current financial indebtedness (K) + (L) + (M)	(42,447) 0 0		0 0 0	0.0%	(44,250) 0 0		0 0 0	0.0%
O Net financial indebtedness (J) + (N)		(70,635) 0 0 (449) 0 (449)		0.6%			(114,037) 0 0 (249) 0 (249)	0.2%

______________________________________________________________________________________________

Legend for the Related parties column heading:

A Parent companies

B Associates

C Affiliates and Jointly controlled companies

D Other related parties

The values reported in the tables above refer to the related parties listed below:

Group A - Parent companies:

• Asco Holding S.p.A.

Group B - Associates:

• Asco TLC S.p.A.
• Seven Center S.r.l.

Group C - Affiliates and jointly controlled companies

• o Estenergy S.p.A.
• o ASM Set S.r.l.
• o Unigas Distribuzione S.r.l.
• o Sinergie Italiane S.r.l. in liquidation

Group D - other related parties:

• Board of Directors
• Auditors
• Strategic managers

Significant events after the end of the period considered

Shareholder's Meeting held on 28th April 2016

The Shareholders' Meeting of Ascopiave S.p.A. convened in its ordinary session on 28th April 2016, chaired by Mr. Fulvio Zugno. During the meeting, the 2015 yearly statement was approved and the Meeting agreed to distribute a dividend of € 0.15 per share. The dividend was paid on 11th May 2016 with ex-dividend date on 9th May 2016 (record date on 10th May 2016).

________________________________________________________________________________________________

Furthermore, the Meeting has approved the remuneration policy of the Company, set out in compliance with Art. 123/3 of the Unified Finance Law as well as a new purchase and sale plan of treasury shares under the terms of articles 2357 and 2357-ter of the Civil Code, to replace and revoke the previous authorisation of 23rd April 2015.

Synthesis data as of 31st March 2016 of jointly controlled companies consolidated through the net equity method

Estenergy S.p.A.

The Group holds a 48.999% stake in Estenergy S.p.A., a jointly controlled entity selling natural gas and electricity to end customers and wholesalers.

The stake of the Group in Estenergy S.p.A. is recognised in the consolidated financial statements through the net equity method. Please find below the economic and financial synthesis data related to the company, based on the financial statements prepared in compliance with IFRSs, and the reconciliation with the accounting value of the stake in the consolidated financial statements:

Ascopiave Group

Balance sheet - summary data

(Thousands of Euro)	31.03.2016	31.12.2015
Current assets	82,840	61,728
of which
Cash and cash equivalents	6,483	2,751
Non-current assets	73,125	73,452
Current liabilities	54,255	38,647
of which
Current financial liabilities	8	18
Non - current liabilities	5,848	5,974
	95,861	90,560
Group inteterest	48.999%	48.999%
Net profit for the period attributable of the Group	46,971	44,373

Statement of profit/(loss) for the period (synthesis data);

Income Statement - summary data

(Thousands of Euro)		Financial year 2016 Financial year 2015
Revenues	53,918	64,599
Total operating costs	45,634	56,360
Gross operative margin	8,284	8,239
Amortization and depreciation	443	501
Operating result	7,841	7,738
Financial income	65	57
Financial charges	5	67
Earnings before tax	7,901	7,614
Taxes of the period	2,599	2,550
Result of the period	5,301	5,064
Group inteterest	48.999%	48.999%
Net profit for the period attributable of the Group	2,598	2,481

Unigas Distribuzione S.r.l.

The Group holds a 48.86% stake in Unigas Distribuzione S.r.l., a jointly controlled entity active in the distribution of natural gas.

________________________________________________________________________________________________

The stake of the Group in Unigas Distribuzione S.r.l. is recognised in the consolidated financial statements through the net equity method. Please find below the economic and financial synthesis data related to the company, based on the financial statements prepared in compliance with IFRSs, and the reconciliation with the accounting value of the stake in the consolidated financial statements:

______________________________________________________________________________________________

Balance sheet - summary data (Thousands of Euro) 31.03.2016 31.12.2015 Current assets 19,805 14,848 of which Cash and cash equivalents 4,940 3,322 Non-current assets 45,989 46,146 Current liabilities 23,250 18,764 of which Current financial liabilities 0 0 Non - current liabilities 839 929 41,704 41,302 Group inteterest 48.860% 48.860% Net profit for the period attributable of the Group 20,377 20,180

Statement of profit/(loss) for the period (synthesis data);

Income Statement - summary data

(Thousands of Euro)		Financial year 2016 Financial year 2015
Revenues	3,062	4,024
Total operating costs	1,812	2,766
Gross operative margin	1,251	1,257
Amortization and depreciation	603	568
Operating result	647	689
Financial income	1	0
Financial charges	22	18
Earnings before tax	626	671
Taxes of the period	223	244
Result of the period	403	427
Group inteterest	48.86%	48.86%
Net profit for the period attributable of the Group	197	209

Asm Set S.r.l.

The Group holds a 49% stake in Asm Set S.r.l., a jointly controlled entity selling natural gas and electricity to end customers and wholesalers.

________________________________________________________________________________________________

The stake of the Group in Asm Set S.r.l. is recognised in the consolidated financial statements through the net equity method. Please find below the economic and financial synthesis data related to the company, based on the financial statements prepared in compliance with IFRSs, and the reconciliation with the accounting value of the stake in the consolidated financial statements:

______________________________________________________________________________________________

Balance sheet - summary data
(Thousands of Euro)	31.03.2016	31.12.2015
Current assets	11,997	10,707
of which
Cash and cash equivalents	2,112	4,375
Non-current assets	5,499	5,538
Current liabilities	8,001	8,058
of which
Current financial liabilities	0	0
Non - current liabilities	984	995
	8,511	7,192
Group inteterest	49.000%	49.000%
Net profit for the period attributable of the Group	4,170	3,524

Statement of profit/(loss) for the period (synthesis data);

		Income Statement - summary data
--	--	---------------------------------	--	--

(Thousands of Euro)		Financial year 2016 Financial year 2015
Revenues	11,101	13,173
Total operating costs	9,116	11,319
Gross operative margin	1,985	1,854
Amortization and depreciation	51	52
Operating result	1,934	1,801
Financial income	5	7
Financial charges	1	7
Earnings before tax	1,940	1,802
Taxes of the period	621	568
Result of the period	1,319	1,234
Group inteterest	49.00%	49.00%
Net profit for the period attributable of the Group	646	605

Goals and policies of the group

As for the natural gas distribution segment, the Group intends to enhance its portfolio of concessions, aiming at confirming its service provision in the territorial areas served, in which it boasts a significant presence, and at expanding its activities to other fields, with the goal of increasing its market share and strengthen its local leadership. As for the segment of gas sale, the Group intends to implement the necessary actions to safeguard the current levels of profitability in an ever-changing market, through a trade policy focused on the proposition of differential pricing formulas and improvement of the quality of service.

________________________________________________________________________________________________

In this segment, the Group intends to pursue the objectives of increasing its market share by direct acquisition of new customers, and through extraordinary company mergers and/or partnerships.

______________________________________________________________________________________________

Pieve di Soligo, 12th May 2016

Chairman of the Board of Directors Fulvio Zugno